UNIVERSITY  OF  CALIFORNIA   SAN  DIEGC 


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Date  Due 


MSL 


PROBLEMS  OF 
READJUSTMENT 
AFTER  THE  WAR 


JOHN  E. 


IT 


PROBLEMS  OF 
READJUSTMENT 
AFTER  THE  WAR 


JOHN  E.  BENNETT 


D.  APPLETON  AND  COMPANY 

NEW  YORK      ::      ::      LONDON 

1915 


COPTKIOHT,  1015,  BT 

D.  APPLETON  AND  COMPANY 


Printed  u,  the  UniUd  SUtw  of  America 


JOHN  E.  BENNETT 


CONTENTS 

PAGE 

I.    THE  WAR  AND  DEMOCRACY 1 

Albert  Bushnell  Hart,  Ph.D.,  LL.D., 
Litt.D.  Professor  of  the  Science  of  Gov- 
ernment, Harvard  University. 

II.    AN  ECONOMIC  INTERPRETATION  OF  THE  WAR    .      37 

Edwin  E.  A.  Seligman,  LL.B.,  Ph.D., 
LL.D.,  Professor  of  Political  Economy, 
Columbia  University. 

ILL    THE  CRISIS  IN  SOCIAL  EVOLUTION     ...       73 

Franklin  H.  Giddings,  Ph.D.,  LL.D.,  Pro- 
fessor of  Sociology  and  the  History  of 
Civilization,  Columbia  University. 

IV.     THE    RELATION    OF   THE   INDIVIDUAL    TO   THE 

STATE 98 

Westel  W.  Willoughby,  Ph.D.,  Professor 
of  Political  Science,  Johns  Hopkins  Uni- 
versity. 

V.    THE  WAR  AND  INTERNATIONAL  LAW  .       .       .     129 

George  Grafton  Wilson,  Ph.D.,  LL.D.,  Pro- 
fessor of  International  Law,  Harvard  Uni- 
versity. 

v 


CONTENTS 

PAOI 

VI.    THE  WAR  AND  INTERNATIONAL  COMMERCE  AND 

FINANCE 150 

Emory  R.  Johnson,  Ph.D.,  Sc.D.,  Pro- 
fessor of  Transportation  and  Commerce, 
University  of  Pennsylvania. 

ft 

VTL    THE  CONDUCT  OF  MILITARY  AND  NAVAL  WAR- 
FARE   179 

Caspar  F.  Goodrich,  Rear-Admiral  United 
States  Navy,  Retired 


VI 


PROBLEMS    OF    READJUST- 
MENT AFTER  THE  WAR 


THE  WAR  AND  DEMOCEACY 

ALBEKT  BUSHNELJJ  HAKT 

"The  proof  of  democracy,"  says  an  Ameri- 
can sage,  "is,  does  it  democ?"  Just  now  that 
question  comes  home  to  all  civilized  mankind. 
Up  to  the  twenty-third  of  July,  1914,  every  sig- 
nificant nation  in  the  world  from  Montenegro 
to  British  Columbia  had  at  least  the  appearance 
of  the  admission  of  the  people  to  a  share  in 
their  own  government.  Democracy  was  consid- 
ered the  ripest  flower  of  the  highest  civilization. 
Out  of  the  nine  great  powers  of  the  world,  three 
— the  United  States,  France,  and  China — were 
republics  in  form;  and  in  each  of  the  other  six 
• — Great  Britain,  Germany,  Austro-Hungary, 

1 


PROBLEMS  OF  READJUSTMENT 

Russia,  Italy,  and  Japan — the  representatives 
of  the  people  had  established  their  right  to 
share  the  government  with  the  personal  sover- 
eign. 

Today  seven  of  those  nine  powers  are  plunged 
into  the  heat  of  the  fray;  and  in  every  one 
democracy  seems,  for  the  time  being,  sub- 
merged. In  not  one  of  those  countries  are  the 
people  or  their  representatives  now  legislat- 
ing for  the  crisis  or  keeping  the  ministerial  ex- 
ecutives in  control  by  questions  and  criticisms 
upon  military  affairs.  Nor  does  it  appear  that 
the  people  at  large  or  the  voters  in  any  country 
resent  this  exclusion  from  a  part  in  the  great 
decisions  that  are  being  made.  We  hear 
vaguely  of  bread  riots;  but  the  only  constitu- 
tional crisis  that  has  come  about  in  the  eight 
months  of  the  war  has  been  the  change  of  for- 
eign minister  in  Austro-Hungary  from  an  Aus- 
trian to  an  Hungarian.  In  England  a  few  criti- 
cisms of  the  government  are  made  in  the  public 
press ;  most  of  which  are  received  by  the  public 
as  disloyal  utterances;  none  appears  in  Ger- 
many except  a  rare  complaint  by  Socialist  mem- 
bers of  the  Reichstag.  There  is  no  public  opin- 
ion— or  rather  public  opinion  compels  every  one 
not  only  to  support  the  war  but  to  support  it 

2 


THE  WAR  AND  DEMOCRACY 

with  vehemence.  Unhappy  subjects  of  hostile 
countries  are  treated  all  over  Europe  as  though 
they  were  escaped  convicts. 

In  the  strongly  monarchical  countries  of  Bus- 
sia,  Germany  and  Austro-Hungary  the  author- 
ity was  naturally  retained  by  the  emperor  and 
his  immediate  group  of  councilors  and  officers. 
In  all  three  countries  the  army  and  navy  are 
closely  centralized,  and  parliaments  have  never 
had  much  to  do  with  them  except  to  vote  upon 
the  terms  of  service  and  the  money  credits.  It 
is  only  about  a  year  and  a  half  since  the  Ger- 
man Eeichstag  by  a  vote  of  293  to  54,  expressed 
its  discontent  at  the  ill-treatment  of  the  civil- 
ians of  Zabern  by  military  officers ;  nevertheless, 
Chancellor  Bethmann-Hollweg  refused  to  re- 
sign and  allowed  the  officers  to  be  acquitted  by 
court-martial.  In  France  and  England  the  leg- 
islative bodies  have  for  many  years  been  accus- 
tomed to  take  a  lively  part  in  government  while 
war  was  going  on.  Not  even  in  the  Boer  War  of 
1899-1900,  nor  in  the  serious  likelihood  of  wars 
involving  France  in  1905  and  1911,  did  those 
bodies  abdicate  their  functions.  They  have 
done  so  now.  For  when  the  representatives  of 
the  people  are  silent,  the  necessary  decisions 
are  not  postponed,  they  are  simply  made  by 

3 


PROBLEMS  OF  READJUSTMENT 

the  executive.  In  this  war  the  civil  authori- 
ties have  either  given  carte  blanche  to  the  mili- 
tary or  have  accepted  and  carried  out  their 
will. 

Is  this  the  end  of  European  democracy? 
Will  example  and  military  pressure  cause  the 
end  of  American  democracy?  Are  the  people 
of  the  world  giving  over  their  destinies  to  the 
judgment  of  a  handful  of  statesmen  and  war- 
riors, practically  designated  by  themselves? 
Have  the  peoples  as  a  whole  no  wisdom  left? 
Is  there  a  difference  in  the  makeup  of  the  hu- 
man mind  between  times  of  war  and  times  of 
peace?  Or  when  the  cyclone  is  past,  will  the 
owners  of  the  various  ships  of  state  again  claim 
their  right  to  their  own  property?  These  crit- 
ical questions  come  home  with  peculiar  force 
to  the  people  of  the  United  States ;  for  popular 
government  in  America  depends  upon  the 
power  of  democracy  to  repel  the  shock  of  mili- 
tarism. 

One  reason  for  the  atrophy  of  parliaments  is 
that  in  every  belligerent  country  the  people 
accepted  the  war  when  it  broke  out,  took  it  up, 
made  it  their  own,  and  are  carrying  it  on  as  a 
national  duty.  In  every  country  the  thinking 
people  as  well  as  the  unthinking  were  convinced 

4 


THE  WAR  AND  DEMOCRACY 

that  their  country  had  been  unjustly  and  mali- 
ciously attacked  and  would  be  destroyed  unless 
the  population  rallied  to  the  support  of  the 
government.  The  way  for  this  conviction  was 
prepared  by  a  long  propaganda  in  newspapers, 
periodicals,  and  books,  especially  in  Germany, 
Great  Britain,  and  France.  For  more  than  ten 
years,  writers  in  all  three  countries  have  tried 
to  arouse  their  countrymen  to  a  belief  that  they 
were  in  imminent  danger  of  invasion  by  im- 
placable enemies. 

For  example,  in  1897  an  English  admiral  in 
the  Fortnightly  Review  declared  that  "if  Ger- 
many were  extinguished  tomorrow,  there  is  not 
an  Englishman  in  the  world  who  would  not  be 
richer."  In  1912  Bernhardi's  book  stated  more 
clearly  than  previous  writers  the  aspirations 
and  dangers  of  Germany  and  demanded  for  her 
41  world-power  or  downfall."  Cartoons,  pam- 
phlets, and  elaborate  books  have  set  forth  the 
grievances  of  various  countries  and  have  sug- 
gested methods  of  carrying  on  "the  next  war." 
In  Eastern  Europe  a  campaign  of  hate  has  been 
going  on  ever  since  the  Turkish  Eevolution  of 
1908.  The  Austrians  and  the  Hungarians  had 
T)een  gradually  accumulating  a  reservoir  of 
wrath  against  the  Servians,  because  of  their 

5 


PROBLEMS  OF  READJUSTMENT 

manifest  hope  to  split  off  the  Serb  provinces 
from  Austro-Hungary.  The  Russians  have 
been  nursing  resentment  ever  since  1908,  when 
they  had  not  the  military  strength  to  resist  the 
annexation  of  Bosnia  and  Herzegovina  by 
Austria. 

In  the  French  school  geographies,  Alsace- 
Lorraine  has  for  years  been  shown  in  a  differ- 
ent color  from  the  rest  of  Germany.  Treitschke 
long  ago  taught  his  countrymen  that  ' '  England 
is  today  the  shameless  representative  of  bar- 
barism in  international  law."  Before  the  war 
broke  out  thousands  of  respectable  people  who 
could  not  bring  themselves  to  believe  unproved 
evil  of  their  own  friends  and  neighbors,  the 
people  whom  they  knew  best,  were  convinced 
that  unknown  Englishmen  and  Englishwomen, 
Russians,  Germans  or  Servians,  were  sodden 
with  crime  and  thirsting  for  other  people's 
blood. 

All  this  in  spite  of  decades  of  efforts  to  bring 
people  into  a  better  understanding  with  each 
other,  and  a  conscious  effort  to  found  a  kind 
of  world  democracy  of  men  of  science,  letters, 
and  business.  Students  have  traveled  from 
country  to  country;  fellowships  have  been 
founded  for  foreigners;  professors  have  been 

6 


THE  WAR  AND  DEMOCRACY 

exchanged;  addresses  delivered  by  men  from 
other  countries.  There  has  been  an  era  of  world- 
congresses  of  physicians,  of  historians,  of  elec- 
tricians, of  engineers.  Considerable  groups  of 
business  men  have  traveled  about  to  make  them- 
selves acquainted  with  the  spirit  of  foreign 
countries.  When  the  crisis  came,  of  course 
every  man  adhered  to  his  own  country:  one 
cannot  serve  two  masters.  Was  it  also  neces- 
sary for  every  man  to  deny  his  own  experience 
of  the  character,  courtesy,  and  high-minded- 
ness  of  his  foreign  friends  ?  Philosophic  Eucken 
rolls  under  his  tongue  as  a  sweet  morsel  a  de- 
nunciation of  "Servian  accessories  to  murder, 
Russian  lust  for  conquest,  English  perfidious- 
ness,  and  at  last,  Japanese  scoundrelism,  all 
united."  On  the  other  side  the  Catholic  Arch- 
bishop of  Glasgow  declares  the  war  to  be, 
"Christianity  against  paganism,  the  Cross  and 
its  civilization  against  the  crescent  and  its  bar- 
barism ;  against  the  even  worse — because  delib- 
erate and  calculated — barbarism  of  the  War 
Lord." 

It  is  a  fair  question  whether  most  of  these 
good  people  who  enjoy  bad  language  would  not 
have  been  just  as  sure  of  the  greatness  of 
their  respective  nations  and  the  wisdom  of 

7 


PROBLEMS  OF  READJUSTMENT 

their  leaders  if  they  had  been  told  that  all  the 
monarchs  and  all  the  ministers  were  convinced 
that  there  was  no  sufficient  cause  for  war.  The 
trouble  in  such  crises  is  that  it  is  impossible  for 
the  people  to  form  a  judgment  as  to  the  danger, 
because  they  have  not  the  facts.  They  must 
rely  on  somebody  to  judge  of  the  crisis  as  a 
whole.  In  the  United  States  we  should  expect 
the  Senators  and  Eepresentatives  of  the  na- 
tional Congress  in  such  a  crisis  to  be  the  peo- 
ple's eyes  and  lips.  Congress  might  be  more 
belligerent  than  the  President,  as  it  was  at  the 
beginning  of  the  Spanish  War  in  1898 ;  but  Con- 
gress then  believed  that  its  constituents  ex- 
pected the  action  they  took,  and  that  was  why 
only  one  member  of  the  House  ventured  to 
suggest  even  a  brief  delay.  Let  the  name  of 
Boutelle  of  Maine  be  remembered  as  that 
of  a  brave  and  honest  man  who  wished  at 
least  to  give  public  opinion  an  opportunity  to 
form. 

When  the  pinch  came  in  Europe  not  a  single 
one  of  the  national  legislatures,  based  on  popu- 
lar representation,  did  its  duty.  The  facts  are 
obvious  and  dangerous.  At  the  time  the  war 
broke  out  four  of  these  bodies  were  actually  in 
session  or  could  be  immediately  summoned. 

8 


THE  WAR  AND  DEMOCRACY 

The  Parliament  of  Great  Britain,  the  Reich- 
stag of  Germany,  the  Senate  and  Chambre  of 
France,  and  the  Russian  Duma  were  in  exist- 
ence, filled  with  national  concern,  ready  to  give 
their  wisdom  toward  the  great  decisions  that 
had  to  be  made.  Not  one  of  them  was  consulted 
till  after  war  had  actually  broken  out.  Sir  Ed- 
ward Grey's  first  definite  statement  to  Parlia- 
ment was  on  the  third  of  August,  a  day  after 
he  had  committed  his  nation  to  the  protection 
of  the  French  coast.  The  Reichstag  was  con- 
sulted on  August  4  when  Germany  was  already 
at  war  both  with  Russia  and  with  France.  Pre- 
mier Viviani  made  an  imperfect  statement  to 
the  Chambre  on  August  3  and  not  till  August  5 
did  he  fully  explain  the  situation.  The  Rus- 
sian Duma  was  called  in  special  session  August 
8,  seven  days  after  war  had  broken  out  with 
Germany.  The  Japanese  Diet  was  in  session 
and  acquiesced  in  the  war;  but  when  later  it 
would  not  vote  the  military  measures  which  the 
Prime  Minister  thought  necessary  it  was  dis- 
solved and  a  new  election  ordered.  In  Austro- 
Hungary  there  is  no  federal  parliament;  but 
neither  the  Austrian  nor  Hungarian  parliament 
was  consulted  either  as  to  the  ultimatum  sent 
to  Servia  July  23,  or  on  the  attitude  of  the  Im- 

9 


PROBLEMS  OF  READJUSTMENT 

perial  Government  toward  the  various  proposi- 
tions for  mediation  or  toward  a  direct  under- 
standing with  Russia. 

When  summoned,  every  parliament  practi- 
cally abdicated;  and  probably  would  not  have 
been  allowed  to  remain  in  session  if  it  had  not 
been  expected  to  abdicate.  Representative  de- 
mocracy in  Europe  seems  almost  to  have  dis- 
appeared for  the  time  being.  In  not  one  of 
those  countries  are  the  people  through  their 
representatives  now  legislating  for  their  ex- 
traordinary needs,  or  keeping  track  of  the  man- 
ner in  which  their  affairs  are  carried  out  by 
ministerial  executives.  Only  in  London  are 
questions  put  which  might  imply  a  lack  of  con- 
fidence in  any  military  man  or  action.  All  the 
parliaments  vote  prodigious  measures  without 
assuming  the  right  to  alter  a  hair's  breadth. 
The  British  Parliament  strove  for  nearly  two 
centuries  to  acquire  control  over  the  purse ;  and 
is  now  ready  to  vote  a  thousand  million  dollars 
in  a  paragraph  without  so  much  as  a  suggestion 
as  to  the  destination  and  use  of  the  money. 
Enough  that  it  is  to  be  spent  by  the  military 
men  in  carrying  on  the  war.  The  German  Diet 
voted  the  supply  asked  for  by  the  government 
with  only  one  negative  vote.  Numerous  stat- 

10 


THE  WAR  AND  DEMOCRACY 

utes  solemnly  enacted  after  long  and  careful 
discussion  by  the  legislative  authority  are  now 
superseded  or  ignored  by  votes  of  the  Bundes- 
rath  in  Germany,  or  by  Orders  in  Council  is- 
sued by  the  British  Ministry  under  a  general 
authority  from  Parliament.  That  conquered 
provinces  should  be  governed  by  military  com- 
manders who  levy  contributions,  assess  fines  on 
the  cities,  and  exercise  the  power  of  life  and 
death,  is  not  remarkable.  So  much  was  done 
in  the  Philippines  by  the  American  military  au- 
thorities. It  is,  however,  an  amazing  spectacle 
to  see  the  interior  of  lands  which  have  hardly 
as  yet  seen  an  enemy — England,  Scotland, 
Ireland,  Brandenburg,  Bavaria,  and  South- 
ern France — practically  governed  by  martial 
law. 

One  of  the  triumphs  and  protections  of  demo- 
cratic government  is  the  liberty  of  the  press. 
It  has  been  won  by  sheer  determination  in  the 
teeth  of  the  fundamental  belief  of  despotic  and 
dull  governments  that  it  is  hurtful  to  them  to 
have  people  discuss  what  is  going  on.  In  Rus- 
sia there  is  still  a  pig-headed  censor  system  in 
times  of  peace,  with  its  blacking-brush  obliter- 
ation of  what  the  censor  does  not  like.  Yet  even 
there,  since  the  establishment  of  the  Duma, 

11 


PROBLEMS  OF  READJUSTMENT 

there  has  been  an  approach  to  common-sense. 
In  Austria  and  Germany  the  journalists  have 
been  more  or  less  tied  up  by  official  deposits  of 
money  which  can  be  drawn  upon  in  case  of  fines 
or  verdicts  against  them.  They  have  even  had 
the  droll  institution  of  the  "  jail  editor" !  Every 
journal  has  been  required  to  file  the  name  of 
its  responsible  editor;  in  many  cases  he  is  a 
man  whose  sole  "responsibility"  is  to  take  his 
sentence  and  go  to  jail  whenever  his  paper  has 
been  too  bold.  In  France  there  was  a  reckless 
freedom  of  the  press,  restrained  by  occasional 
shootings.  Germany  has  for  years  had,  along- 
side many  free  and  fearless  newspapers,  the 
institution  of  the  reptile  press,  which  crawls  at 
the  feet  of  the  government  functionaries  who 
feed  it  with  official  information  and  subsidies. 
Nevertheless  editors  and  journalists  like  Maxi- 
milian Harden  of  Berlin  and  Emile  Zola  have 
rendered  a  magnificent  service  to  civilization  by 
focusing  the  attention  of  the  voters  upon  a  case 
of  oppression  or  corruption.  As  recently  as 
1911,  almost  the  whole  press  of  Germany  de- 
nounced the  slashing  of  the  lame  schoolmaster 
of  Zabern  by  the  undaunted  Lieutenant  von 
Forstner.  In  England  every  newspaper  has 
been  free  to  say  anything  it  chose  about  any 

12 


THE  WAR  AND  DEMOCRACY 

public  official,  though  liable  to  be  cast  in  heavy 
damages  if  it  assailed  a  private  reputation. 

How  is  it  today?  Even  in  England  there  is 
no  such  thing  as  a  free  press.  Among  the  bel- 
ligerent powers  no  criticisms  are  allowed  on 
military  movements  or  commanders,  and  the  of- 
fense of  printing  the  truth  about  things  already 
known  and  published  in  other  countries  may 
lead  to  severe  punishment.  The  government 
was  so  childish  as  to  conceal  the  loss  of  the 
Audacious,  which  was  known  to  hundreds  of 
people.  People  expect  censors  in  Austria,  but 
it  seems  ridiculous  for  the  London  newspapers 
to  be  deprived  of  dispatches  which  go  freely 
to  America.  Bernard  Shaw  and  Vernon  Lee 
tell  John  Bull  that  he  is  vain,  stupid,  and  no 
better  than  his  neighbors,  and  that  is  allowed 
to  pass.  Otherwise  the  military  censors  every- 
where employ  the  blue  pencil  and  scissors. 
Partly  because  of  this  lack  of  common-sense 
news,  in  all  countries  there  is  a  rage  and  fury 
against  the  unhappy  citizens  of  enemy  coun- 
tries who  have  been  stranded  away  from  home. 
The  fear  of  spies  is  very  like  the  fear  of  witches 
in  colonial  times,  not  founded  on  reason  or  af- 
fected by  the  lack  of  evidence.  The  possession 
of  a  German  name,  doing  business  behind  a 

13 


PROBLEMS  OF  READJUSTMENT 

German  sign,  speaking  a  German  sentence,  may 
draw  a  mob  upon  an  innocent  person  in  a  non- 
German-speaking  country.  Free  thought,  pub- 
lic discussion,  the  will  of  the  people,  seem  to 
have  lost  their  meaning. 

One  of  the  main  arguments  for  universal  mili- 
tary service  is  that,  since  every  able-bodied 
military  man  is  a  soldier  and  in  most  coun- 
tries also  a  voter,  the  representatives  of  the 
people  will  never  sanction  a  war  that  is  not 
absolutely  unavoidable.  In  the  present  great 
struggle  not  one  country  was  held  back  for  five 
minutes  by  the  pressure  of  its  citizen  soldiery. 
In  fact,  the  breaking  out  of  the  war  is  a  con- 
clusive proof  that  universal  service  brings  about 
a  habit  of  mind  which  is  very  unfavorable  to 
democracy.  The  citizen  may  oppose  war, 
speak  against  it,  write  against  it,  ask  his  rep- 
resentative to  vote  against  it.  The  same  man 
as  a  soldier  is  taught  that  to  oppose  war  is 
cowardly,  a  breach  of  discipline,  contrary  to  the 
spirit  of  the  service.  On  one  side  a  man  is  an 
independent  unit  in  a  great  aggregation  and  he 
may  join  with  other  units  in  peaceable  remon- 
strance. On  the  other  side,  he  is  an  undivided 
part  of  a  military  community  in  which  argu- 
ment, hesitation,  and  discussion  are  traitorous. 

14 


THE  WAR  AND  DEMOCRACY 

An  army  made  up  of  democrats  is  not  a  demo- 
cratic army,  least  of  all  in  services  like  those 
of  Germany  and  Austria ;  there,  the  officers  are 
of  a  different  social  class  from  the  men,  and 
have  no  conception  of  accepting  the  decision  of 
men  in  the  ranks  as  a  restraint  upon  their 
own  action. 

Here  is  the  evidence  that  even  a  mild  mili- 
tarism has  very  unfavorable  effects  upon 
democracy,  even  where  it  consists  only  in  giv- 
ing a  favored  position  to  military  men,  exalt- 
ing military  courage  and  preaching  the  gospel 
of  obedience  to  one's  superior  officer.  The  goal 
of  Americans  is  freedom.  The  joy  of  American 
living  is  the  right  to  have  one's  own  way.  The 
child  looks  forward  to  the  day  when  he  will  be- 
come a  man  and  can  play  a  man's  independent 
part.  The  sculptor  searches  for  inspiration  in 
the  picturesque  life  of  his  own  country  and 
molds  the  frontiersman,  the  Indian,  the  cow- 
boy. The  triumph  of  American  education  is 
the  right  of  the  professor  to  speak  his  mind. 
As  a  nation  we  go  to  an  excess  in  freedom.  The 
tramp  follows  his  instinct  to  wander  and  to  be 
fed  by  strangers.  The  yellow  journal  pushes 
the  right  of  a  free  press  to  the  point  of  scur- 
rilousness.  Children  select  their  schools  and 

15 


PROBLEMS  OF  READJUSTMENT 

colleges,  their  friends  and  amusements.  The 
trade  in  poisonous  drugs  is  just  now  coming 
under  regulation.  Yet  there  is  no  genuine  and 
wholesome  American  who  does  not  feel  that 
these  extravagances  are  to  be  endured,  if  neces- 
sary, to  keep  the  two  pearls  of  great  price — 
freedom  of  body  from  the  control  of  another 
person,  and  the  freedom  of  the  soul  to  see  and 
to  describe  things  as  they  are. 

War  is  the  negative  and  denial  of  freedom. 
All  modern  wars  rest  upon  the  universal  legal 
principle  that  it  is  the  right  of  the  state  to 
command  the  service  of  any  or  all  of  its  sons. 
The  free  American  may  be,  indeed  ought  to  be, 
compelled  to  undergo  some  military  training. 
If  he  formally  enrolls  himself  in  the  militia,  he 
must  obey  orders  to  turn  out  for  drill,  camp, 
maneuvers,  or  riot  service.  The  recruited  man, 
the  militiaman,  and  the  drafted  man  may  all 
be  forced  into  the  army  in  case  of  actual  war. 
Once  a  man  puts  on  the  knapsack  and  takes 
hold  of  the  rifle,  he  becomes  the  servant  of  his 
officers  and  the  bondman  of  the  state.  "Obey 
orders,"  is  the  first  and  last  letter  of  the  sol- 
dier's alphabet.  That  means  to  march  for  ap- 
parently unending  days,  to  carry  heavy  bur- 
dens, to  perform  repulsive  tasks,  to  live  on 

16 


THE  WAR  AND  DEMOCRACY 

scanty  food,  to  drink  noxious  water,  to  sleep 
in  the  mud  and  wake  to  a  miserable  meal.  The 
better  organized  the  army,  the  more  thoroughly 
does  the  once  free  man  become  a  machine,  or 
rather  a  cog  in  a  machine.  If  his  orders  are  to 
fire  at  the  enemy,  he  sends  his  bullet  in  the  air 
and  it  descends  to  kill  a  man  whom  he  has  never 
seen  and  who,  if  he  could  have  known  it,  might 
have  been  a  heart  friend.  He  must  obey  orders 
if  they  bid  him  throw  his  living  body  into  the 
cracking,  hissing  zone  of  death.  He  must  obey 
orders  if  he  is  directed  to  fire  on  non-com- 
batants, or  to  drop  bombs  on  nursemaids  and 
babies  in  perambulators,  or  to  sink  a  ship  full 
of  helpless  women  and  children.  Disobedience, 
even  under  such  circumstances,  is  the  heaviest 
of  sins,  to  be  atoned  for  by  a  disgraceful  court- 
martial  and  a  shameful  traitor's  death. 

This  is  the  contrast  between  freedom  and 
war,  the  one  aiming  to  make  men  rational,  think- 
ing, considering  beings;  the  other  depending 
on  the  expectation  that  men  will  abdicate  their 
own  souls  and  do  just  what  they  are  told. 
Hence,  war  has  been  the  enemy  of  republics  in 
all  ages.  The  Greek,  the  Roman,  and  the  medi- 
eval democracies  all  went  down  in  blood  at 
last.  What  is  the  hope  for  mankind,  the  safety 

17 


PROBLEMS  OF  READJUSTMENT 

of  civilization,  if  Mars  is  to  lay  his  mailed  hand 
upon  the  shoulder  of  every  able-bodied  man  and 
say,  "Think  no  more;  only  shoot"?  On  one 
side,  democracy,  on  the  other,  militarism,  con- 
tend for  the  dominion  of  the  world. 

In  the.  last  quarter-century  the  organized 
Socialists  have  been  a  power  in  the  affairs  of 
government ;  in  some  countries  they  express  the 
purposes  of  the  working  classes.  In  Germany 
the  so-called  Social  Democratic  party  is  the  only 
party  of  protest,  and  its  candidates  receive  the 
votes  of  hundreds  of  thousands  of  those  who 
are  discontented  with  what  they  think  the  arbi- 
trariness of  the  government.  In  the  United 
States  the  avowed  Socialists  polled  900,000 
votes  in  the  presidential  election  of  1912.  They 
are  in  most  countries  well  organized  and  are 
strong  advocates  of  an  international  under- 
standing between  the  working  classes.  Previ- 
ous to  the  war  they  were  expected  to  defend 
ultra-democratic  principles.  What  have  they 
done  in  the  present  crisis  !  As  an  organization 
they  have  in  all  countries  simply  abdicated  for 
the  time  being. 

When  the  pinch  came  it  was  natural  that  the 
English  Socialist  should  be  an  Englishman  first, 
and  a  Socialist  after  the  war  shall  be  over.  But 

18 


in  the  militaristic  countries  there  is  a  stronger 
reason  for  joining  in  the  war  with  heart  and 
soul.  In  Germany,  for  example,  the  aim  of  the 
Socialists  is  to  show  that  they  are  not  the  dan- 
gerous and  destructive  class  that  has  been  pic- 
tured by  high  authority.  They  expect  eventu- 
ally to  lead  the  majority  of  their  countrymen 
to  their  way  of  thinking,  and  their  influence 
would  be  absolutely  destroyed  for  decades  to 
come,  if  after  the  war  they  should  be  held  up  as 
the  sole  body  of  Germans  who  would  not  defend 
the  Fatherland.  The  Socialists  at  the  front 
are  earning  the  right  to  say,  "  We  have  not  only 
lived  with  you ;  we  have  died  with  you.  And  you 
can  no  longer  hold  that  our  doctrines  are  con- 
trary to  patriotism  and  to  self-defense. ' '  John 
Burns,  the  labor  leader,  resigned  from  the  min- 
istry in  England,  but  that  was  not  because  he 
was  a  Socialist,  but  because  he  felt  with  justice 
that  he  and  his  friends  had  not  been  consulted 
like  other  members  of  the  Cabinet;  that  the 
aristocracy  had  made  a  capital  decision  with- 
out them. 

Yet  though  Socialism  as  a  principle  is  para- 
lyzed in  the  great  war,  Socialism  as  a  principle 
has  never  in  the  history  of  mankind  won  such 
a  victory.  The  method  of  the  war  has  given 

19 


PROBLEMS  OF  READJUSTMENT 

the  Socialists  ammunition  for  half  a  century  to 
come ;  it  proves  their  contention  that  the  com- 
munity can  work  more  efficiently  through  col- 
lective effort  than  through  individual  effort. 
Never  has  state  Socialism  been  practiced  on 
such  a  scale  and  over  such  an  area.  For  the 
transportation  and  supply  of  armies,  all  the 
governments  have  taken  whatever  they  wanted. 
They  have  for  the  time  being  nationalized  the 
railroads,  the  food  supply,  the  manufacture  of 
arms,  and  will  apply  the  same  principles  to  the 
putting  in  and  harvesting  of  crops,  the  produc- 
tion of  mines,  and  the  output  of  factories. 
What  an  uplift  of  the  world  would  come  about, 
if  the  nations  could  apply  to  such  matters  as 
education  and  social  welfare  the  same  terrific 
energy,  the  same  abnegation  of  individual  profit 
and  interest  and  direction!  Unfortunately,  or 
perhaps  fortunately,  this  tremendous  single- 
minded  national  devotion  is  possible  only  be- 
cause it  is  unusual.  A  horse  can  be  urged  to 
put  forth  for  a  few  minutes  four  or  five  times 
the  muscular  strength  which  he  usually  employs 
for  drawing  a  load,  but  nothing  will  compel 
him  to  keep  up  that  effort  for  a  day  or  an  hour. 
The  screws  of  a  monster  ship  will  work  steadily 
when  they  are  submerged,  but  when  the  ship 

20 


THE  WAR  AND  DEMOCRACY 

pitches,  and  the  screws  come  out  of  the  water, 
they  may  rack  the  machinery  to  pieces. 

Nevertheless  the  state  Socialism  thus  em- 
ployed is  not  of  a  kind  that  commends  itself 
to  the  Socialist.  It  accords  with  the  maxim, 
' '  from  everybody  according  to  his  ability, ' '  but 
does  not  accept  '  *  to  everybody  according  to  his 
needs."  The  army  comes  first,  second,  third 
and  fourth  in  the  scale  of  thought  and  expendi- 
ture. To  keep  the  army  going,  men  must  work ; 
and  a  strike  in  the  arms  factory  is  looked  upon 
as  hardly  less  than  treason.  All  the  great  coun- 
tries involved,  except  England,  have  the  un- 
questioned right  to  call  out  every  man  physic- 
ally able  to  take  part  in  a  campaign,  and  proba- 
bly millions  who  are  not  physically  able.  Eng- 
land will  eventually  come  to  conscription  if  the 
war  lasts  long  enough;  because  the  "thin  red 
line  of  'eroes"  will  not  be  numerous  enough  for 
the  crisis  of  attack  or  defense. 

It  is  going  beyond  orthodox  Socialism  to 
compel  men  to  work  under  military  guard,  and 
that  is  what  every  European  country  will  do 
if  it  cannot  otherwise  keep  up  the  supply  of  food 
and  munitions.  The  commandeering  of  metals 
and  food  already  practiced  by  Germany  and 
Austria  will  be  adopted  by  other  nations  if  that 

21 


PROBLEMS  OF  READJUSTMENT 

is  the  only  way  to  keep  the  populations  alive 
and  to  supply  the  armies. 

That  is  indeed  the  statecraft  of  our  In- 
ternational Workers  of  the  World;  but  the 
I.  W.  W.  expect  to  control  supply  and  trans- 
portation through  their  own  chosen  leaders,  and 
not  through  any  sort  of  hereditary  or  military 
officials.  Socialists  may  enter  the  army  to  fight 
a  foreign  enemy ;  yet  when  it  comes  to  the  point 
of  shooting  down  fellow  Socialists  because  they 
question  the  authority  of  the  government,  state 
Socialism  runs  on  a  rock.  It  is  hard  to  see  how 
this  new  Socialistic  state  differs  from  the  old- 
fashioned  despotisms  which  assumed  the  right 
to  seize  any  or  all  of  the  property  in  their  coun- 
try in  order  to  use  it  for  what  they  assumed 
to  be  national  purposes.  What  is  the  difference 
in  theory  of  government  between  a  state  in 
which  Lord  Kitchener  calls  out  men  and  directs 
the  distribution  of  food,  and  one  in  which  Louis 
XIV  did  the  same  thing? 

For  many  years  the  advocates  of  peace  have 
been  banking  upon  the  self-interests  of  the  busi- 
ness men,  both  large  and  small.  Have  they  not 
a  strong  influence  upon  government  in  every 
country?  The  great  money-lenders  were  sup- 
posed to  form  anti-war  syndicates,  looking  after 

22 


THE  WAR  AND  DEMOCRACY 

their  interest  and  their  coupons,  and  their  ex- 
pirations and  the  drawings  of  their  bonds  for 
payment.  The  world  had  almost  come  to  be- 
lieve that  the  power  of  commercial  and  finan- 
cial syndicates  was  the  greatest  in  the  state. 
Inasmuch  as  they  have  financed  the  wars  of  the 
past  half-century,  they  thought  they  were  in  a 
steel  fortress ;  they  believed  apparently  that  no- 
body could  make  war  without  their  lead.  Was  it 
not  the  money-lenders  or  rather  the  no-money- 
lenders, who  made  necessary  the  Peace  of  Ports- 
mouth in  1905  between  Japan  and  Russia?  Was 
it  not  the  bankers  who  by  withdrawing  the 
French  funds  in  1911  nearly  brought  about  a 
panic  on  the  Berlin  Bourse,  and  proved  to  the 
Germans  that  they  could  not  afford  to  go  to 
war  on  the  Agadir  incident?  On  the  contrary, 
so  far  as  the  great  capitalists  work  through 
their  ramifying  influences  on  the  electorate  or 
by  direct  contact  with  the  executives,  they  have 
absolutely  failed  to  delay  the  war  by  a  single 
twenty-four  hours.  During  the  last  twelve 
months  they  have  acted  as  reservoirs  of  capital, 
and  have  remarkably  supported  the  operations 
of  their  governments.  The  popular  subscrip- 
tions to  the  German  and  English  loans  are  un- 
deniable proofs  of  the  strength  and  flexibility  of 

23 


PROBLEMS  OF  READJUSTMENT 

the  modern  financial  system.  Nevertheless  the 
capitalists  accept  the  doctrine  that  it  is  their 
business  to  lend  and  not  to  consult.  The  power, 
weight,  and  authority  of  the  men  of  business 
have  for  the  time  being  ceased  to  control  their 
governments. 

Another  class  of  business  men  is  that  of  the 
small  dealers,  manufacturers  and  traders  who 
up  to  this  time  in  all  countries  have  kept  up 
profitable  business,  notwithstanding  the  ten- 
dency to  bring  industries  together  into  large 
units.  Whatever  the  limitations  on  the  suf- 
frage, this  class  everywhere  possesses  it ;  and  it 
is  as  much  interested  as  any  class  in  politics, 
elections  and  popular  government.  Here,  if 
anywhere,  ought  to  be  found  a  solid  wall  of  re- 
sistance against  an  unnecessary  war,  and  an  un- 
breakable determination  to  take  part  by  dis- 
cussion and  through  representatives  in  the 
management  of  affairs.  Yet  that  class  has 
shown  no  more  resisting  power  or  directing 
power  than  the  laborers  or  the  capitalists.  Ger- 
many has  always  been  interested  in  and  pro- 
tective of  der  kleine  Mann.  In  England  the 
small  shopkeeper  is  still  a  pillar  of  the  state, 
and  in  France  the  family  business  and  indus- 
tries are  the  admiration  of  all  investigators. 

24 


THE  WAR  AND  DEMOCRACY 

Could  not  those  people  rally  to  defend  their 
obvious  interests'?  They  stand  to  lose  more 
than  anybody  else.  The  workman  who  survives 
the  war  will  find  employment,  perhaps  on  more 
favorable  terms  than  before.  The  great  cap- 
italist will  come  out  the  creditor  of  his  country, 
and  his  children  and  grandchildren  will  draw 
the  interest.  The  small  men  stand  to  lose  more 
than  their  proportion  of  lives,  all  their  savings, 
and  very  likely  their  business. 

With  the  small  business  man  is  closely  asso- 
ciated the  farmer,  whether  land-owning  or  rent- 
ing; and  that  includes  a  considerable  part  of 
the  peasants  in  all  the  European  countries. 
Those  people  ought  to  be  depended  upon  to 
look  after  their  own  interests.  All  representa- 
tive democracies  consider  them  the  safest  class 
in  the  state.  Yet  in  not  a  single  country  has 
that  class  asserted  itself !  Higher  taxes,  expro- 
priation of  crops  and  stocks  of  goods  by  the 
state,  the  draining  of  their  savings,  the  stop- 
page of  their  little  trade,  any  one  of  these 
things  would  cause  an  overturn  at  the  next  elec- 
tions in  ordinary  times;  yet  they  are  all  ac- 
cepted without  a  quaver.  What  is  the  matter? 
Have  men  lost  their  interest  in  their  own  af- 
fairs, their  farms,  their  gardens,  their  crops, 

25 


PROBLEMS  OF  READJUSTMENT 

their  workshops,  their  offices?  Has  the  desire 
to  make  one's  children  safe  and  comfortable 
ceased  to  be  a  motive  in  the  human  mind? 
Above  all,  has  the  democracy  which  has  been 
growing  steadily  for  a  hundred  and  fifty  years, 
suddenly  lost  its  vitality? 

The  picture  of  the  apparent  abdication  of 
popular  government  in  Europe  has  been  de- 
liberately drawn  in  strong  colors,  because  it  is 
a  part  of  a  problem  to  which  the  people  of  the 
United  States  are  now  directing  their  minds. 
In  not  a  single  European  country  have  the  peo- 
ple any  intention  of  giving  up  the  hard-earned 
right  to  share  in  their  own  government.  There 
is  no  reason  to  doubt  that  the  German  Social- 
ists, for  instance,  will  continue  to  send  to  the 
Eeichstag  a  large  number  of  their  representa- 
tives. Some  of  the  oppressed  classes  at  the  bot- 
tom of  the  social  and  political  scale  may  come 
to  their  own.  If  Jews  in  Poland  and  Gypsies 
in  Eoumania  can  die  for  their  country,  have 
they  not  earned  the  right  to  live  in  it  on  equal 
terms?  The  confidence  of  the  various  peoples, 
their  sacrifices,  their  heroism,  ought  to  be  a  liv- 
ing lesson  that  they  are  capable  of  helping  to 
direct  the  destinies  of  their  land.  The  Duma 
which  has  stood  by  the  Czar  and  the  aristoc- 

26 


THE  WAR  AND  DEMOCRACY 

racy  of  Russia  can  hardly  be  treated  in  this 
furnace  flame  as  a  set  of  visionary  radicals. 
The  war  ought  to  draw  the  social  classes  of 
every  country  closer  together. 

The  real  reason  for  the  present  state  of  de- 
mocracy is  obviously  that  the  people  of  every 
nation  believe  that  their  only  hope  of  victory 
is  in  concentration  of  their  force.  What  they 
have  actually  done  is  to  constitute  groups  of 
dictators  for  the  time  being.  Never  was  there 
a  greater  mistake  than  to  suppose  that  the  Em- 
peror Francis  Joseph  and  Kaiser  Wilhelm  II 
are  tyrants  who  have  usurped  power.  Author- 
ity has  been  deposited  in  their  hands  because 
national  armies,  directed  by  a  single  impulse, 
are  doubly  as  effective  as  armies  acting  sepa- 
rately. We  of  the  United  States  know  that  full 
well,  because  General  Grant  in  1864  was  the 
first  man  to  insist  that  the  Eastern  and  Western 
armies  should  move  at  the  same  time  and  with 
a  common  purpose ;  and  that  is  why  Grant  and 
Sherman  and  Thomas  and  Farragut  finished  up 
the  war.  Even  in  our  war  the  legal  authority 
was  concentrated  in  the  hands  of  President  Lin- 
coln. No  military  critic  would  admit  that  the 
Senate  and  House  at  that  time  contributed  much 
to  military  efficiency.  The  main  service  of  Con- 

27 


PROBLEMS  OF  READJUSTMENT 

gress  was  to  keep  the  government  in  touch  with 
the  people  at  large,  and  to  maintain  enthusiasm 
through  four  dragging  years.  The  Germans 
are  right  and  the  English  are  right  in  their 
feeling  that  the  whole  country  must  pool  its 
issues,  must  concentrate  its  confidence,  must 
accept  great  decisions  made  by  a  few  self-chosen 
people. 

For  the  national  dangers  are  terrific.  Every 
belligerent  except  Eussia  has  thrown  into  the 
fray  its  existence  on  the  scale  which  it  deems 
respectable.  If  Great  Britain  is  defeated,  she 
will  lose  a  great  part  of  her  colonies  and  the 
naval  prestige  accumulated  during  three  cen- 
turies. If  Austria  is  defeated,  she  may  be  dis- 
membered. If  Servia  is  defeated,  she  becomes 
a  province  of  Austria,  which  to  the  Servians  is 
a  repulsive  Nirvana.  The  Belgians  have  been 
defeated  and  for  the  time  being  have  gone  off 
the  map  of  Europe.  The  midst  of  such  danger 
is  no  time  to  stickle  on  a  vote  or  a  parliamentary 
inquiry. 

All  the  European  countries  are  much  more 
familiar  than  we  are  in  the  United  States  with 
capital  decisions  made  by  others  than  legisla- 
tors. They  have  a  tradition  of  royal  preroga- 
tive enhanced  by  the  titles,  distinctions,  re- 

28 


THE  WAR  AND  DEMOCRACY 

wards,  and  promotions  which  are  at  the  dis- 
posal of  the  sovereign.  In  England  treaties  are 
made  by  the  ministry  and  submitted  to  Parlia- 
ment for  discussion  after  they  have  gone  into 
effect.  In  France,  the  ministry  and  the  indi- 
vidual ministers  use  large  authority  to  bind  the 
individual  even  in  time  of  peace.  Imperial  re- 
scripts, royal  orders,  and  ministerial  minutes 
have  the  force  of  law;  and,  so  far  forth,  Euro- 
peans do  not  feel  the  sense  of  usurpation  that 
would  be  roused  by  similar  action  in  this 
country. 

Hence  it  is  idle  to  suppose  that  the  war  may 
result  in  the  overthrow  of  European  thrones 
except  perhaps  in  the  Balkans.  King  George 
and  perhaps  Victor  Emmanuel  of  Italy  are  the 
only  royal  sovereigns  whose  jobs  might  be  en- 
dangered ;  because  the  difference  between  their 
being  kings  and  being  simply  an  Englishman 
or  an  Italian  is  already  small.  The  Russians, 
the  Austrians,  and  the  Germans  have  no  na- 
tional conception  of  a  government  without  a 
crown.  The  out-and-out  Republicans  in  those 
countries  are  few,  though  those  who  desire 
democratic  government  are  many.  Whatever 
the  result  in  any  of  the  European  countries,  it  is 
likely  that  either  misfortune  or  victory  will  bind 

29 


PROBLEMS  OF  READJUSTMENT 

closer  together  the  sovereign  and  the  people 
who  have  labored  and  suffered  together. 

Will  the  war  also  enhance  the  representative 
part  of  the  various  governments?  That  de- 
pends in  large  degree  upon  the  success  of  re- 
publican France  and  essentially  democratic 
England.  The  world  is  bound  to  take  notice  of 
the  relative  efficiency  of  popular  and  aristo- 
cratic governments.  The  ordinary  voter  is  not 
a  political  philosopher,  and  if  England  and 
France  win,  even  by  dispensing  with  the  parlia- 
mentary regime  for  the  time  being,  the  people 
will  feel  that  democracy  has  triumphed.  They 
will  feel  so  rightly,  because  it  will  be  a  proof 
that  countries  brought  up  under  popular  gov- 
ernment, in  which  the  military  and  naval  sys- 
tems and  preparations  are  subject  to  parlia- 
mentary control,  can  hold  their  own  against 
armies  officered,  trained  and  directed  by  a  more 
nearly  absolute  system.  Eome  was  no  less  a 
republic  after  Cincinnatus  returned  to  his  plow. 
Some  republics  have  perished  in  similar  crises, 
because  the  commanders  of  the  army  and  navy 
have  turned  upon  their  creators;  but  nobody 
has  the  slightest  dread  of  a  King  Kitchener  the 
First  or  an  Empereur  Joffre  Premier,  or  a 
Kaiser  Hindenburg.  It  is  a  fine  tribute  to  de- 

30 


THE  WAR  AND  DEMOCRACY 

mocracy  that  nobody  dreads  the  Man  on  Horse- 
back. 

The  success  of  the  combination  of  Germany, 
Austria-Hungary  and  Turkey  would  reaffirm 
the  Oriental  type  of  government  in  the  Turkish 
Empire,  in  which  the  Young  Turks,  with  all 
their  efforts,  have  not  been  able  to  establish  an 
actual  parliamentary  government,  and  are  ruled 
by  a  self-perpetuated  cabal.  Thereafter  Tur- 
key would  stand  toward  Germany  in  the  rela- 
tion that  Egypt  occupied  toward  Great  Britain 
down  to  the  present  war — a  nominally  inde- 
pendent nation,  while  actually  in  complete  de- 
pendence on  its  sponsor. 

As  for  Austria-Hungary,  it  seems  impossible 
that  the  Slav  elements  in  a  reconstituted  em- 
pire should  not  gain  more  liberty  and  right  of 
self-expression  than  in  times  past.  They  de- 
serve something,  for  they  have  inflicted  a  big 
scare  on  the  monarchy,  yet  have  not  revolted. 
The  present  forms  of  democracy  may  be  ex- 
pected to  continue  in  Germany ;  for  the  German 
Reichstag  with  its  manhood  suffrage  was  or- 
ganized by  Bismarck  so  as  to  give  to  the  smaller 
states  substantial  representation  in  the  empire. 
Doubtless  success  in  war  would  somewhat  exalt 
Prussianism,  militarism,  distinctions  of  classes 

31 


PROBLEMS  OF  READJUSTMENT 

and  military  methods  of  government,  which 
seem  to  outsiders  so  contrary  to  the  genuine 
spirit  of  democracy.  In  any  case  no  European 
country  is  likely  to  change  either  from  de.moc- 
racy  to  monarchy  or  from  monarchy  to  democ- 
racy. The  future  trend  from  or  towards  democ- 
racy will  depend  on  who  is  the  victor. 

Although  the  United  States  of  America  seems 
to  be  quite  outside  the  danger  zone,  we  have 
something  to  learn  from  the  experience  of  our 
democratic  neighbors  abroad.  First  of  all  are 
we  wise  in  putting  the  immediate  control  of 
our  armies  and  navies  into  the  hands  of  civil- 
ians 1  In  our  four  external  wars  since  1789  and 
in  our  Civil  War,  the  commander-in-chief  of  the 
armies  and  navies  was  in  every  case  a  civilian. 
We  have  had  several  presidents  who  were 
chosen  because  of  their  military  reputation — 
Jackson,  Harrison,  Taylor,  Grant — but  not  one 
of  them  took  the  conduct  of  a  war  upon  his 
hands.  Perhaps  the  American  suspicion  of 
military  men  as  more  likely  to  make  themselves 
despots  has  no  foundation;  but  civilian  presi- 
dents ought  to  have  military  and  naval  experts 
upon  whom  they  can  throw  direct  responsibility. 

Military  experts  have  their  failings,  but  it  is 
the  business  of  their  lives  to  study  the  military 

32 


THE  WAR  AND  DEMOCRACY 

needs  of  their  country  and  to  keep  abreast  of 
the  advance  in  military  science  and  machinery. 
The  United  States  might  well  follow  the  exam- 
ple of  military  countries  like  France  and  Eng- 
land in  frequently  putting  at  the  head  of  the 
departments  of  war  and  navy  men  who  are 
trained  in  that  specialty.  In  the  long  list  of 
secretaries  of  the  navy  since  1798,  the  only  well- 
known  name  of  a  naval  commander  is  John 
Rogers,  who  was  ad  interim  for  a  few  days  in 
1823.  The  first  secretary  of  war,  General  Knox, 
was  appointed  because  he  was  a  trained  mili- 
tary administrator;  and  Pickering,  McHenry, 
and  Armstrong  were  military  men.  Winfield 
Scott  served  about  three  weeks  ad  interim;  but 
Jefferson  Davis  was  the  only  experienced  sol- 
dier to  be  appointed  to  the  office  except  during 
the  troubled  period  of  reconstruction  when 
Grant,  Schofield  and  Sherman  served  for  a  few 
weeks. 

If  the  country  absolutely  cannot  trust  its 
army  to  a  soldier  and  its  navy  to  a  sailor,  it 
absolutely  must  put  military  men  in  places  of 
recognized  responsibility.  With  great  difficulty 
the  army  has  secured  a  general  staff,  the  chief 
of  which,  however,  is  supposed  not  to  be  in  the 
confidence  of  the  administration.  Congress  has 

33 


PROBLEMS  OF  READJUSTMENT 

refused  the  similar  naval  staff  which  is  essen- 
tial. Congress  is  not  stingy.  In  the  year  pre- 
vious to  the  present  war,  the  United  States 
government  spent  more  money  for  military  and 
naval  purposes  than  any  European  power. 
We  may  as  well  do  in  advance  what  Great 
Britain  has  been  compelled  to  do  by  the  danger 
of  national  ruin — we  may  as  well  select  a  man 
of  brains  and  intrust  him  with  the  task  of  reor- 
ganizing the  army,  which  sorely  needs  it.  The 
United  States  is  protected  by  three  thousand 
miles  of  water  and  besides  that,  by  the  naval 
first  line  of  defense;  after  that  by  the  use  of 
mines  such  as  are  protecting  the  coasts  of  Eng- 
land, France  and  Germany  from  a  landing  of 
enemies.  Still  those  three  countries  have  more 
than  twenty  thousand  men  available  to  resist 
an  attack  if  the  first  and  second  lines  were 
broken !  France  and  Great  Britain  have  far  ex- 
ceeded the  United  States  in  preparations,  and 
yet  both  were  caught  without  a  sufficient  amount 
of  material  and  a  clear  knowledge  of  where  the 
human  units  were  to  come  from.  It  was  not 
creditable  to  the  kingdom  of  Great  Britain  and 
the  empire  of  India  that  324,000,000  human  be- 
ings should  have  had  at  their  disposal  in  a  mo- 
ment of  supreme  danger — leaving  out  of  ac- 

34 


THE  WAR  AND  DEMOCRACY 

count  the  garrisons  in  Africa  and  Asia — less 
than  100,000  troops  available  for  immediate 
service.  It  is  still  less  creditable  to  the  United 
States  that  100,000,000  human  beings  should 
rely  upon  a  net  effective  force  capable  of  being 
thrown  at  any  point  on  our  eastern  coast  of  less 
than  25,000.  We  have  the  keenest  desire  to 
maintain  democracy  in  the  western  world,  but 
there  can  be  no  democracy  of  the  United  States 
unless  there  is  a  United  States  capable  of  keep- ' 
ing  out  hostile  armies. 

Above  all  American  democracy  must  recog- 
nize that  armies  are  made  up  of  soldiers.  The 
English  territorials  and  colonial  levies  have 
been  molded  in  from  four  to  six  months  into 
good  troops ;  but  if  the  Germans  had  been  able, 
as  seemed  not  impossible,  to  land  an  army  in 
England,  the  United  Kingdom  would  have  col- 
lapsed. Thereupon  Paris  would  probably  have 
been  captured.  It  is  a  crime  which  ought  to 
be  punishable  by  confinement  in  a  state's 
prison,  for  the  American  people  to  rely  upon 
untrained  volunteers  for  future  wars.  Their 
quality  is  high  and  once  properly  drilled  and 
officered  they  could  march,  fight,  and  hold 
trenches  against  any  soldiers  in  the  world.  But 
the  experience  of  the  United  States  in  every 

35 


PROBLEMS  OF  READJUSTMENT 

war  from  the  Kevolution  to  the  Spanish  War 
has  been  that  the  refusal  to  give  military  train- 
ing till  the  war  is  actually  breaking  out  means 
a  fearful  waste  of  treasure  and  of  lives.  The 
wars  of  the  future  are  going  to  be  fought  by 
great  masses  of  trained  men.  What  American 
democracy  needs  is  simply  to  apply  to  its  own 
defense  the  principles  of  organization,  expert 
service,  and  efficiency  which  have  made  its  rail- 
roads and  mines  and  factories  so  productive. 
This  favored  country  cannot  go  on  indefinitely 
enjoying  the  privileges  of  modern  life  without 
taking  account  of  the  present  changes  in  war- 
fare and  international  relations. 


n 


AN  ECONOMIC  INTEEPEETATION  OF 
THE   WAR 

EDWIN  E.  A.  SELIGMAN 

There  have  been  almost  as  many  explanations 
of  the  great  war  as  there  have  been  writers. 
The  explanations,  moreover,  have  ranged  over 
a  very  wide  field :  personal  jealousies,  dynastic 
differences,  militarism,  wounded  pride,  the  en- 
deavor to  round  out  political  boundaries,  racial 
antagonism,  not  to  speak  of  such  high-sounding 
phrases  as  struggle  for  liberty,  or  fight  for  na- 
tional existence — all  these  and  many  more  have 
been  advanced  for  popular  consumption.  What 
is  lacking  in  them  all,  however,  is  a  realiza- 
tion of  the  fact  that  a  conflict  on  this  gigantic 
scale  must  be  explained  on  broader  lines  than 
any  of  those  mentioned.  Wherever  our  sym- 
pathies may  lie  in  the  present  struggle,  it  be- 
hooves us,  as  students  of  the  philosophy  of  his- 

37 


PROBLEMS  OF  READJUSTMENT 

toiy,  to  take  a"  position  far  removed  from  the 
petty  interests  of  any  of  the  contending  par- 
ties. Servia  tells  us  that  she  is  fighting  for 
independence;  Austria  maintains  that  she  is 
struggling  against  political  disruption;  Eussia 
asserts  that  she  is  contending  for  the  liberties 
of  the  smaller  Balkan  States ;  France  urges  that 
she  is  endeavoring  to  restore  freedom  to  her 
lost  provinces ;  England  puts  in  the  foreground 
resistance  to  the  insolent  pretensions  of  mili- 
tarism and  protection  of  small  nationalities; 
Germany  claims  a  place  in  the  sun;  and  Japan 
— well,  Japan  is  fighting  to  defend  large  rather 
than  small  nationalities,  that  is,  to  free  China 
from  German  domination.  In  each  country, 
with  scarcely  a  single  exception,  there  has  been 
a  truly  national  uprising.  Each  of  the  contest- 
ants considers  that  he  is  fighting  for  a  holy 
cause,  and  is  thoroughly  convinced  not  only  of 
the  justice  of  his  own  claims  but  of  the  infamy 
of  his  adversary's.  Earely  in  the  world's  his- 
tory has  there  been  presented  such  a  spectacle 
of  genuine  and  universal  enthusiasm  penetrat- 
ing every  nook  and  cranny  of  the  belligerent 
countries,  combined  not  only  with  an  utter  in- 
ability on  the  part  of  each  to  understand  the 
position  of  the  other,  but  also  with  a  fierce  and 

38 


AN  ECONOMIC  INTERPRETATION 

implacable  hatred  between  the  more  prominent 
contestants. 

But  if,  amid  the  actual  clash  of  arms,  it  is 
impossible  for  any  of  the  belligerents  to  see  the 
situation  in  its  true  light,  is  there  any  excuse 
for  us,  as  neutrals  and  would-be  philosophers, 
to  content  ourselves  with  the  explanations  that 
are  born  of  mutual  prejudice  f  Is  it  not  rather 
incumbent  upon  us  to  realize  that  there  are 
deeper  world  forces  at  work  which  are  respon- 
sible for  the  present  titanic  conflict ;  and  if  so, 
is  it  not  somewhat  hasty  to  endeavor  to  appor- 
tion praise  or  blame  for  what  is  the  inevitable 
result  of  world  forces  1 

The  starting-point  of  our  analysis  is  the  ex- 
istence of  nationality.  Modern,  as  distinct  from 
medieval,  and  in  part  from  ancient,  political, 
life,  is  erected  on  national  foundations.  The 
city  states  of  classic  antiquity  or  of  the  Middle 
Ages,  although  forming  political  entities,  had 
no  direct  relation  to  the  facts  of  nationality. 
There  were  in  fact  no  nations :  there  were  peo- 
ples and  races  and  states,  but  no  nations.  The 
Greek  states  warred  with  each  other,  and  there 
was  an  Hellenic  people ;  but  there  was  no  Greek 
nation.  Eome  overran  the  world,  and  the 
Eoman  Empire  included  many  peoples  and 

39 


PROBLEMS  OF  READJUSTMENT 

races ;  but  we  cannot  properly  speak  of  a  Roman 
nation.  In  the  later  Middle  Ages,  the  Italian 
and  the  German  cities  were  often  at  war  with 
their  neighbors ;  but  there  was  no  Italian  state 
or  German  state,  and  still  less  an  Italian  nation 
or  a  German  nation.  Modern  political  organi- 
zation, on  the  other  hand,  is  framed  on  national 
lines ;  and  it  is  now  universally  recognized  that 
the  creation  in  the  seventeenth  century  of  the 
first  great  national  states  on  the  continent,  as 
well  as  the  solidification  of  the  British  common- 
wealth, was  due  to  economic  forces.  It  was  now 
that  what  the  economists  call  the  local  or  town 
economy  gave  way  to  the  national  economy ;  it 
was  now  that  land  as  a  predominant  economic 
force  was  replaced  or  supplemented  by  com- 
mercial and  industrial  capital.  Land  in  its  very 
nature  is  local ;' capital,  in  its  essence,  trans- 
cends local  bounds.  The  rise  of  the  national 
state  was  an  accompaniment  of  the  change  in 
economic  conditions. 

From  that  time  to  this  the  basis  of  national 
life  has  been  economic  in  character.  I  do  not, 
of  course,  desire  for  a  moment  to  deny  that 
other  factors  have  contributed.  National  con- 
sciousness is  a  subtle  product  of  many  forces, 
among  which  geographical  situation,  common 

40 


AN  ECONOMIC  INTERPRETATION 

language,  inherited  traditions  and  similar  so- 
cial and  political  ideals  have  all  contributed  to 
perpetuate  the  racial  characteristics  which 
differentiate  one  nation  from  another.  That 
racial  and  even  religious  differences  have  in 
the  past  frequently  led  to  sanguinary  contests 
goes  without  saying;  and  he  would  be  ven- 
turesome indeed  who  would  dare  to  predict 
that  the  future  has  not  in  store  for  the  world 
many  a  conflict  referable  to  these  same 
causes. 

If,  however,  we  trace  the  history  of  the  world 
during  the  past  few  centuries  we  are  struck  by 
the  fact  that,  on  the  one  hand,  nations  of  dif- 
ferent races  have  lived  together  in  complete 
amity,  and  that,  on  the  other  hand,  separate 
nations  belonging  to  the  same  race  and  the  same 
religion  have  often  indulged  in  the  most  vio- 
lent conflicts.  Examples  like  the  war  between 
England  and  the  United  States,  between  Chile 
and  Peru,  between  Prussia  and  Austria,  could 
easily  be  multiplied.  If  in  these  cases  the  old 
explanation  of  racial  antagonism  obviously  does 
not  suffice ;  if  on  the  contrary  the  political  con- 
tests in  such  cases  were  due  to  more  fundamen- 
tal economic  causes,  is  it  not  fair  to  assume  that 
as  between  nations  of  different  races  as  well, 

41 


PROBLEMS  OF  READJUSTMENT 

similar  economic  causes  often  lie  at  the  bottom 
of  the  controversy? 

While  economic  considerations  indeed  do  not 
by  any  means  explain  all  national  rivalry,  they 
often  illumine  the  dark  recesses  of  history  and 
afford  on  the  whole  the  most  weighty  and  satis- 
factory interpretation  of  modern  national  con- 
tests which  are  not  clearly  referable  to  purely 
racial  antagonisms  alone.  The  present  strug- 
gle is  without  doubt  to  be  put  into  the  same 
category.  To  say,  however,  that  nationalism  in 
its  economic  aspects  is  the  root  of  the  present 
trouble  is  not  yet  adequate.  For  we  have  still 
to  explain  why  there  should  have  been  such  a 
recrudescence  of  nationalism  of  recent  years. 
On  the  contrary,  it  might  be  asked,  if  the  mod- 
ern age  is  essentially  a  capitalist  age,  why 
should  we  not,  in  the  face  of  the  international 
aspects  of  capitalism,  have  a  growth  of  inter- 
nationalism rather  than  of  nationalism?  Why 
should  we  not  be  on  the  brink  of  that  era  of 
universal  free  trade,  of  permanent  peace  and 
of  international  brotherhood  for  which  Adam 
Smith  and  the  Manchester  School  so  valiantly 
contended?  Why  is  it  that  after  the  downfall  of 
the  Mercantile  System — which  was  nothing  but 
the  economic  side  of  the  great  national  move- 

42 


AN  ECONOMIC  INTERPRETATION 

ment  of  the  seventeenth  and  the  eighteenth  cen- 
turies— we  should  witness,  hand  in  hand  with 
the  undoubted  growth  of  international  inter- 
course and  mutual  understanding,  the  revival 
of  the  so-called  Neo-mercantilism,  as  found  a 
generation  ago  in  almost  all  the  continental 
nations  of  Europe  as  well  as  in  the  United 
States?  And  why  should  we  at  this  very  mo- 
ment be  in  the  presence  of  an  almost  universal 
emergence  of  national  consciousness  which 
threatens  to  destroy  well-nigh  everything  that 
has  been  won  during  the  nineteenth  century, 
and  which  in  its  deplorable  aspects  is  typified 
no  less  by  the  Oxford  pamphlets  of  the  English 
scientists  than  by  the  fulminations  of  the 
German  professors  or  the  decisions  of  the 
French  learned  societies  ?  What  are  the  world 
forces  which  compel  human  beings,  almost  per- 
haps against  their  will,  to  act  as  do  the  foremost 
representatives  of  our  present-day  civiliza- 
tion? 

If  I  read  history  aright,  the  forces  that  are 
chiefly  responsible  for  the  conflicts  of  political 
groups  are  the  economic  conditions  affecting 
the  group  growth.  These  conditions  have  of 
course  assumed  a  different  aspect  in  the  course 
of  history.  The  first  and  most  obvious  reason 

43 


PROBLEMS  OF  READJUSTMENT 

leading  to  an  expansion  of  a  political  group  is 
the  desire  to  insure  a  food  supply  for  the  grow- 
ing population.  It  is  today  a  fairly  well  estab- 
lished fact  that  the  forces  which  set  in  move- 
ment the  migration  of  the  peoples  from  Asia 
to  Europe  and  which  were  responsible  for  the 
so-called  irruption  of  the  barbarians  were  pri- 
marily the  inability  to  maintain  the  flocks  and 
herds,  owing  to  the  gradual  desiccation  of  the 
original  home,  and  the  necessity  of  seeking 
fresh  pastures  abroad.  We  have  recently  been 
taught  that  the  secret  of  the  implacable  enmity 
between  Eome  and  Carthage  was  the  desire  to 
retain  Sicily  as  the  granary  of  the  world.  The 
need  of  an  adequate  food  supply  is  the  first  con- 
cern of  every  political  entity. 

The  next  step  in  the  economic  basis  of  po- 
litical expansion  is  the  desire  to  develop  the 
productive  capacity  of  the  community.  This  al- 
ways assumes  one  of  two  forms.  Where  agri- 
cultural methods  are  still  primitive  and  agri- 
cultural capital  insignificant,  the  system  of  cul- 
tivation is  necessarily  extensive.  As  a  conse- 
quence, and  especially  in  those  countries  where 
slavery  has  developed,  the  need  of  a  continual 
supply  of  fresh  land  as  a  basis  for  profitable 
slave  cultivation,  becomes  imperative.  It  is  this 

44 


AN  ECONOMIC  INTERPRETATION 

fact  which  explains  the  Mexican  War  in  the 
history  of  the  United  States,  as  well  as  number- 
less conflicts  of  former  ages  in  other  parts  of 
the  world. 

On  the  other  hand,  where  agriculture  has 
been  supplemented  by  an  active  commercial  in- 
tercourse, and  especially  in  the  case  of  coun- 
tries contiguous  to  the  sea,  the  desire  for  the  in- 
crease of  wealth  based  on  commercial  profits 
has  in  the  past  everywhere  led  to  a  struggle 
for  the  control  of  the  trade  routes.  From  the 
time  of  Phoenicia  down  to  the  domination  re- 
spectively of  the  Hanse  towns  and  of  Venice, 
the  grandeur  and  decay  of  civilization  may  al- 
most be  written  in  terms  of  sea  power. 

All  these  changes,  however,  were  anterior  to 
the  growth  of  modern  nationalism.  What,  then, 
are  the  points  in  which  modern  struggles  differ 
from  their  predecessors? 

From  this  point  of  view  it  may  be  said  that 
the  first  stage  of  modern  nationalism  represents 
an  analogy  rather  than  a  contrast ;  and  that  it 
is  only  in  the  later  stages  that  the  real  differ- 
ences are  to  be  sought.  In  the  first  stage  of 
modern  nationalism  we  find  in  fact  a  combina- 
tion of  the  three  forces  which,  as  we  have  seen, 
played  so  important  a  role  in  former  times. 

45 


PROBLEMS  OF  READJUSTMENT 

The  closing  of  the  land  route  to  India, 
-through  the  Mohammedan  conquest  of  Con- 
stantinople, and  the  discovery  of  the  New 
"World  were  the  two  chief  factors  which  led  to 
the  development  of  nationality  in  the  sixteenth 
and  seventeenth  centuries.  It  was  at  this  time 
that  the  great  colonial  empires  of  Spain,  Por- 
tugal, Holland,  France  and  England  were 
formed.  The  struggle  to  protect  the  economic 
interests  involved  in  the  colonial  system  led 
necessarily  to  an  organization  on  a  national 
scale.  The  real  basis  of  the  early  colonial  sys- 
tem, however,  was  the  attempt  to  secure  either 
Taw  materials  for  the  incipient  manufactures 
of  the  mother  country,  or  crude  articles  like 
the  spices  from  the  East  Indies,  or  treasure 
from  America.  The  early  colonial  system, 
which  itself  marks  the  transition  from  medieval 
feudalism  to  modern  capitalism,  thus  represents 
an  attempt  to  increase  the  area  of  the  supply 
of  certain  kinds  of  food,  or  the  endeavor  to 
expand  the  basis  of  productivity  by  the  acquisi- 
tion of  fresh  land  calculated  to  yield  raw  ma- 
terials or,  finally,  the  effort  to  secure  what  was 
considered  the  essence  of  wealth  itself  in  the 
shape  of  the  precious  metals.  In  order  to  ac- 
complish each  of  these  results,  a  great  navy 

46 


AN  ECONOMIC  INTERPRETATION 

was  necessary,  and  such  a  navy  could  be  pro- 
vided and  maintained  only  along  national  lines. 
Before  long,  however,  the  accumulation  of 
capital  derived  from  the  profits  of  the  colonial 
empire  found  its  chief  utilization  in  an  appli- 
cation to  industry;  and  as  this  capital  grad- 
ually percolated  through  business  enterprise, 
the  whole  form  of  economic  organization  was 
changed.  In  the  place  of  the  medieval  guild 
system  where  the  same  individual  bought  the 
raw  material,  fashioned  the  commodity,  and 
sold  the  product  to  the  consumer,  there  now 
grew  up  what  was  later  on  known  as  the  do- 
mestic system,  that  is,  the  system  where  the 
first  and  third  stages  of  the  process  were  in, 
the  hands  of  capitalists  who  could  both  buy  the 
raw  material  and  sell  the  product  on  a  large 
scale,  while  the  second  stage  in  the  process  was 
still  carried  on  by  the  individual  workman  in 
his  own  home.  The  emphasis  was  consequently 
now  put  upon  the  protection  of  this  national 
industry  against  its  rivals,  and  the  colonies 
henceforth  became  important,  not  so  much  as 
sources  of  raw  material  as,  on  the  other  hand, 
favorable  markets  for  the  commodities  manu- 
factured in  the  mother  country.  The  so-called 
Mercantile  System  was  badly  named:  because 

47 


PROBLEMS  OF  READJUSTMENT 

although  it  is  true  that  the  prosperity  of  both 
colonies  and  mother  country  depended  on  the 
interchange  of  products  carried  on  through 
overseas  commerce,  the  essence  of  the  system 
was  the  development  of  domestic  industry  on  a 
national  scale.  The  great  wars  of  the  seven- 
teenth and  eighteenth  centuries,  fought  in  or- 
der to  control  the  sea  and  to  expand  the  colonial 
empire,  all  had  in  view  the  development  of  the 
nascent  industry  on  capitalist  lines.  Protec- 
tion of  industry  was,  therefore,  the  character- 
istic mark  of  nationalism  during  this  period. 

With  the  advent  of  the  nineteenth  century, 
however,  Great  Britain  was  ready  to  enter  upon 
the  next  stage  of  development.  Having  built 
np  her  industry  by  the  most  extreme  and  ruth- 
less system  of  protection  that  the  world  has 
ever  known,  and  having  wrested  a  large  part  of 
her  world  empire  from  her  competitors,  Eng- 
land now  found  it  to  her  interest  to  go  over 
from  a  system  of  protection  to  one  of  free  trade. 
The  free-trade  movement,  as  is  almost  always 
the  case  with  great  economic  transitions,  was 
only  ostensibly  in  the  interests  of  the  consumer, 
but  actually  in  the  interests  of  the  producer. 
Thanks  to  a  favorable  conjuncture  of  events  fa- 
miliar to  all  scholars,  the  industrial  revolution 

48 


AN  ECONOMIC  INTERPRETATION 

— which  means  the  complete  application  of  cap- 
italism to  every  stage  of  the  productive  process 
— took  place  first  in  England,  and  thus  consoli- 
dated her  position  of  industrial  primacy.  But 
as  free  trade  and  universal  peace  were  obvi- 
ously the  means  best  calculated  to  perpetuate 
this  industrial  monopoly,  we  find  Great  Britain 
from  this  time  onward  desirous  of  living  in 
amity  with  all  those  countries  which  had  for- 
merly been  her  rivals,  but  which  were  now  hope- 
lessly distanced  in  the  industrial  race  and  which 
were  henceforth  to  be  regarded  as  the  most 
desirable  markets  for  the  output  of  British  fac- 
tories. 

With  the  gradual  spread  of  the  factory  sys- 
tem, however,  into  the  continental  countries,  a 
new  situation  was  engendered.  In  the  first 
place,  economic  pressure  upon  Germany  and 
Italy  gradually  resulted  in  the  creation  of  a 
political  nationality  in  order  to  mobilize  the 
economic  forces  on  a  national  scale.  As  a  con- 
sequence, we  find  emanating  from  those  coun- 
tries, as  soon  as  nationality  was  achieved,  pre- 
cisely the  same  movement  of  protection  to  in- 
dustry which  had  characterized  the  Mercantile 
System  several  centuries  earlier.  Just  as  na- 
tionalism was  the  real  basis  of  the  early  Mer- 

49 


PROBLEMS  OF  READJUSTMENT 


cantilism,  so  this  movement  now  came  to  be 
called  Neo-mercantilism.  In  France,  indeed, 
where,  as  we  know,  nationalism  had  been 
achieved  at  an  earlier  date,  the  new  move- 
ment assumed  a  slightly  different  form, 
namely,  that  of  competition  for  the  mar- 
kets of  the  world.  It  was  this  competi- 
tion for  the  world  market  which  now,  after 
the  period  of  quiescence  and  universal  good  will 
during  the  sixties  and  seventies,  led  in  the 
eighties  to  the  new  movement  for  the  in- 
crease of  the  colonial  empire  on  the  part  of  both 
England  and  France,  and  which  at  one  time 
almost  threatened  to  bring  those  two  great  na- 
tions into  collision  in  Africa.  Moreover,  the 
advent  of  the  industrial  revolution  in  Germany 
and  the  transition  from  the  domestic  to  the 
factory  system  immensely  increased  the  tempo 
of  the  evolution.  Whereas  in  the  first  decade 
after  the  formation  of  the  German  Empire  the 
chief  emphasis  was  put  by  Bismarck  upon  pro- 
tection, now  towards  the  close  of  the  century 
the  national  industry  had  been  built  up  to  such 
an  extent  that  Germany  soon  joined  France  in 
competing  for  the  world  market  against  Eng- 
land. 

This  transition  from  a  period  of  protection 
50 


AN  ECONOMIC  INTERPRETATION 

to  a  period  of  competition  for  markets  would 
not,  however,  have  sufficed  to  bring  about  the 
present  gigantic  struggle.  The  most  important 
phase  of  modern  industrial  capitalism  still  re- 
mains to  be  explained.  After  national  industry 
has  been  built  up  through  a  period  of  protec- 
tion, and  after  the  developed  industrial  coun- 
tries have  replaced  the  export  of  raw  materials 
by  the  export  of  manufactured  commodities, 
there  comes  a  time  when  the  accumulation  of 
industrial  and  commercial  profits  is  such  that 
a  more  lucrative  use  of  the  surplus  can  be  made 
abroad  in  the  less  developed  countries  than  at 
home  with  the  lower  rates  usually  found  in  an 
older  industrial  system.  In  other  words,  the 
emphasis  is  now  transferred  from  the  export 
of  goods  to  the  export  of  capital. 

England  reached  this  stage  a  generation*  or 
two  ago.  For  England,  as  is  well  known,  has 
largely  financed  not  only  North  and  South 
America,  but  also  many  other  parts  of  the  world 
as  well.  In  fact,  the  chief  explanation  of  Eng- 
land's immense  excess  of  imports  is  to  be  found 
in  the  profits  from  her  surplus  capital  annually 
invested  over  the  seas.  Because  of  her  later 
transition  to  the  factory  system,  France  fol- 
lowed at  a  subsequent  period,  but  even  then 

51 


PROBLEMS  OF  READJUSTMENT 

only  to  an  inconsiderable  degree.  For  in  the 
first  place,  the  virtual  cessation  in  the  growth 
of  population  prevented  any  such  increase  of 
output  as  in  England,  although  naturally  aug- 
menting the  per  capita  wealth,  and  especially 
the  prosperity  of  the  peasant.  And  in  the  sec- 
ond place,  since  the  French  are  far  more  con- 
servative, largely  for  the  reasons  just  men- 
tioned, their  annual  surplus,  such  as  it  is,  has 
been  invested  chiefly  in  contiguous  countries 
like  Spain  and  Belgium,  and  later  on,  for  obvi- 
ous reasons,  in  Eussia.  Thus  France  did  not 
develop  into  any  serious  competitor  of  Eng- 
land in  the  capital  market  of  the  world.  On 
the  other  hand,  the  significant  aspect  of  recent 
development  is  the  entrance  of  Germany  upon 
this  new  stage  of  development.  The  industrial 
progress  of  Germany  has  been  so  prodigious 
and  the  increase  of  her  population  so  great, 
that  with  the  opening  years  of  the  present 
century  she  also  began  on  a  continually  larger 
scale  to  export  capital  as  well  as  goods.  It 
was  this  attempt  to  enter  the  preserves  hith- 
erto chiefly  in  the  hands  of  Great  Britain 
that  really  precipitated  the  trouble.  For  if 
the  growth  of  national  wealth  depends  upon 
the  tempo  of  the  accumulation  of  national 

52 


AN  ECONOMIC  INTERPRETATION 

profits,  and  if  the  rate  of  profits  is,  as 
we  have  seen,  far  greater  in  the  application 
of  capital  to  industrially  undeveloped  coun- 
tries, it  is  clear  that  the  struggle  for  the  con- 
trol of  the  international  industrial  market  is 
even  more  important  than  was  the  previous 
competition  for  the  commercial  market. 

Other  and  more  familiar  phases  of  the  eco- 
nomic struggle  have  no  doubt  played  their  role 
in  the  various  countries.  It  is  indubitable,  for 
instance,  that  Russia,  still  a  predominantly 
agricultural  community,  is  endeavoring  to  se- 
cure Constantinople  partly  in  order  to  obtain 
an  unrestricted  vent  for  her  wheat,  partly  in 
order  to  acquire  a  port  which  will  not  be  ice- 
bound for  the  greater  part  of  the  year,  and 
partly  in  order  further  to  consolidate  the  basis 
of  her  national  wealth.  Austria,  which  is  some- 
what further  advanced  in  industrial  develop- 
ment, is  assuredly  interested  in  preventing  in- 
terference with  her  economic  hegemony  in  the 
Balkan  States.  Germany,  because  of  her  close 
union  with  Austria,  is  almost  equally  con- 
cerned in  resisting  the  Russian  pretensions. 
France,  finally,  would  naturally  seek  to  recover 
her  lost  provinces  whenever  the  opportunity 
for  an  effective  cooperation  with  Russia  pre- 
53 


PROBLEMS  OF  READJUSTMENT 

sented  itself.  So  that  those  who  desire  to  inter- 
pret the  war  on  the  lines  of  an  economic  strug- 
gle between  the  Teuton  and  the  Russian  civi- 
lizations would  find  no  little  basis  for  their  con- 
tentions. All  these,  however,  would  not  suffice 
to  explain  the  one  thing  which  needs  elucida- 
tion :  Why  has  the  present  contest  attained  the 
dimensions  of  a  veritable  world  war,  and  why 
has  it  become  clear,  not  only  to  the  dispassion- 
ate observer,  but  to  the  contestants  themselves, 
that  the  real  struggle  is  between  England  and 
Germany? 

If,  however,  Germany  and  England  are  the 
real  antagonists,  the  true  interpretation  of  the 
war  must  rest  on  this  antagonism.  From  this 
point  of  view  it  is  significant  that  England 
should  now  for  more  than  three  centuries  have 
fought  her  way  up  with  successive  rivals  in  turn. 
In  the  seventeenth  century,  England's  chief 
fight  was  against  Holland ;  in  the  eighteenth  cen- 
tury her  greatest  antagonist  was  France,  and 
now,  finally,  she  has  locked  horns  with  Germany. 
To  the  student  of  economic  history,  the  present 
war,  however,  was  just  as  inevitable  as  its  pred- 
ecessors ;  in  this  case,  as  in  the  others,  it  seems 
unnecessary  to  advance  the  minor  explanations 
which  are  currently  found.  England's  war  with 

54 


AN  ECONOMIC  INTERPRETATION 

Holland  was  a  struggle  for  the  control  of  the 
seas  as  a  prelude  to  the  expansion  of  national 
industry.  England's  wars  with  France  were 
contests  for  colonial  empire  resting  on  a  com- 
petition of  markets  for  goods;  England's  war 
with  Germany  marks  the  final  stage  of  a  com- 
petition involving  not  simply  the  export  of 
goods,  but  the  export  of  capital. 

While  Germany  was  in  the  first  stage  of  eco- 
nomic nationalism  she  took  relatively  no  inter- 
est in  colonial  expansion,  but  was  busily  en- 
gaged in  developing  her  industrial  power  and 
in  utilizing  to  that  end  the  same  weapon  of  pro- 
tection which  had  served  Great  Britain  in  such 
good  stead  in  preceding  centuries.  With  the 
consolidation  and  development  of  industrial 
enterprise  Germany  soon  entered  upon  the  sec- 
ond stage  of  economic  nationalism,  that  of  com- 
peting for  the  markets  of  the  world.  The  ex- 
port of  commodities  thus  led  naturally  to  co- 
lonial expansion,  as  a  result  of  which  the  early 
Bismarckian  policy  was  reversed.  With  the  be- 
ginning of  the  present  century,  however,  Ger- 
many entered  upon  the  third  stage  of  economic 
nationalism,  supplementing  the  export  of  goods 
by  the  export  of  capital.  Now  it  was  that  there 
emerged  the  real  rivalry  with  England.  Now 

55 


for  the  first  time  there  came  into  view  the  pos- 
sibility of  the  financial  control  of  large  sections 
of  the  world,  of  which  Morocco  and  Asiatic  Tur- 
key are  good  examples.  These  efforts  for  finan- 
cial control  represented  a  penetration  of  back- 
ward countries  by  a  developed  capitalism — a 
peaceful  penetration  if  possible,  but  a  penetra- 
tion at  all  costs.  For  Germany  was  learning 
the  lesson  from  England's  experience,  and  was 
fully  aware  of  the  fact  that  a  financial  or  cap- 
italistic domination  is  the  surest  avenue  which 
leads  toward  commercial  growth  and  which 
renders  probable  the  greatest  multiplication 
of  profits. 

This  consideration  seems  of  slight  weight. 
Is  it  not  true,  it  might  be  urged,  that  capital  is 
invested  in  foreign  countries  by  people  of  all 
nationalities,  and  that  the  stock  of  modern  cor- 
porations pursuing  their  activities  in  any  coun- 
try is  distributed  among  investors  of  all  finan- 
cial countries!  This  criticism,  however,  does 
not  touch  the  core  of  the  matter.  For  in  the 
first  place  corporation  policy  is  not  influenced 
by  the  minority  stockholders  at  all ;  and  it  is  de- 
termined, so  far  as  nationality  is  concerned,  by 
that  of  the  controlling  directorate.  The  fact 
that  the  shares  of  the  South  African  mines  were 

56 


AN  ECONOMIC  INTERPRETATION 

traded  in  on  the  Berlin  stock  exchange  did  not 
affect  the  close  connection  of  the  British  min- 
ing corporations  with  the  Boer  War.  And  in 
the  second  place,  the  political  influence  which 
goes  with  financial  authority  is  itself  respon- 
sible for  all  manner  of  economic  advantages,  di- 
rect and  indirect.  It  would  be  tedious  as  well 
as  unnecessary  to  recite  in  detail  the  countless 
benefits  that  England  has  derived  from  India, 
or  more  recently  from  Egypt,  and  the  number- 
less subtle  ways  in  which  she  has  contrived,  just 
as  every  other  nation  would  have  done,  to 
retain  most  of  these  benefits  for  herself.  For 
who  will  in  any  way  doubt  that  under  modern 
conditions  political  preferment  is  the  real  open 
sesame  to  economic  advancement?  We  have 
only  to  point  to  what  is  taking  place  at  this 
very  moment  between  China  and  Japan. 

The  German  statesmen  were  simply  learning 
their  lesson  from  the  vast  book  of  English  ex- 
perience. The  German  economists  were,  almost 
to  a  man,  united  in  the  belief  that,  while  it  may 
not  always  be  true  that  trade  naturally  follows 
the  flag,  it  is  clearly  not  open  to  doubt  that 
political  influence  paves  the  way  for  economic 
superiority  and  vastly  enhances  the  opportuni- 
ties for  economic  preferment.  It  was  primarily 

57 


PROBLEMS  OF  READJUSTMENT 

to  augment  this  political  influence  and  to  clinch 
these  expected  financial  and  commercial  advan- 
tages that  a  large  navy,  with  coaling  places  and 
stations  throughout  the  world,  became  a  neces- 
sity. This  attempt,  however,  necessarily  con- 
stituted a  challenge  to  England's  virtual  mo- 
nopoly of  sea  power  and  engendered  in  both 
countries  the  state  of  mind  which  has  finally  re- 
sulted in  the  present  conflict. 

To  say,  then,  that  either  Great  Britain  or 
Germany  is  responsible  for  the  present  war, 
seems  to  involve  a  curiously  short-sighted  view 
of  the  situation.  Both  countries,  nay,  all  the 
countries  of  the  world,  are  subject  to  the  sweep 
of  these  mighty  forces  over  which  they  have  but 
slight  control,  and  by  which  they  are  one  and 
all  pushed  on  with  an  inevitable  fatality.  Eng- 
land, no  less  than  Germany,  Austria  no  less 
than  Russia,  cannot  escape  this  nemesis. 
How  idle  is  it,  therefore,  to  speculate  as  to 
what  the  particular  torch  may  have  been  which 
set  fire  to  the  conflagration !  How  bootless  is  it 
to  attempt  to  estimate  from  the  blue  book  or 
the  white  book  or  the  yellow  book  which  states- 
man or  set  of  statesmen  is  responsible  for  the 
particular  action  that  led  to  the  declaration  of 
war !  If  the  war  could  have  been  averted  now, 

58 


AN  ECONOMIC  INTERPRETATION 

it  was  bound  to  break  out  in  the  more  or  less 
immediate  future.  Germany  like  England, 
Austria  like  Eussia,  Italy  like  Servia,  each  was 
simply  following  the  same  law  which  is  found 
in  all  life  from  the  very  beginnings  of  the  indi- 
vidual cell — the  law  of  expansion  or  of  self- 
preservation. 

It  is  a  curious  fact  that  no  one  should  hitherto 
have  attempted  to  explain  the  paradox  of  in- 
creasing internationalism  combined  with  the 
recrudescence  of  the  newer  nationalism  which 
we  are  witnessing  today.  And  yet,  in  the  light 
of  the  preceding  analysis,  the  explanation  is 
simple.  In  the  earlier  days  of  civilization  the 
stranger  was  the  enemy  because  the  economic 
unit  was  the  local  unit.  With  the  slow  growth 
of  trade,  these  barriers  were  gradually  broken 
down  and  the  feelings  of  enmity  attenuated, 
until,  as  in  the  Roman  Empire,  natural  law  de- 
veloped as  the  law  common  to  all  peoples.  In 
the  same  way,  in  the  later  Middle  Ages,  the 
local  antagonisms  were  disappearing  before 
commercial  progress,  until  we  even  find  dream- 
ers who  several  centuries  ago  welcomed  the 
speedy  advent  of  the  universal  republic  and 
proclaimed  the  impending  reign  of  a  world 
citizenship.  As  we  have  seen,  however,  the  cre- 

59 


PROBLEMS  OF  READJUSTMENT 

ation  of  industrial  capitalism  and  the  birth  of 
nations  in  the  sixteenth  and  seventeenth  cen- 
turies consolidated  the  economic  interests  along- 
national  lines.  While  individuals  now  consid- 
ered themselves  citizens  of  a  country  rather 
than  of  a  town,  national  antagonisms  became 
stronger  than  the  older  local  antagonisms.  Yet 
after  the  first  fierce  onset  of  national  power  the 
forces  of  internationalism  began  to  assert  them- 
selves, and  international  law  was  born,  although 
never  becoming  a  very  lusty  infant.  A  little 
later,  however,  when  Great  Britain  had  com- 
pleted the  first  stage  of  nationalism  through 
protection,  it  was  so  clearly  to  her  interest  to 
emphasize  the  ties  that  bind  nations  together, 
that  her  philosophers  and  economists  found  for 
a  time  a  more  or  less  ready  response  to  their 
cosmopolitan  teachings  among  those  countries 
which  were  not  yet  quite  prepared  to  start  on 
the  road  of  nationalism.  Thus  it  was  that  by 
the  middle  of  the  nineteenth  century  the  pre- 
cepts of  Adam  Smith  were  now  taken  up  by 
Cobden  and  Bright,  and  were  reechoed  in  Ger- 
many, in  Italy,  in  Eussia,  and  in  other  indus- 
trially undeveloped  parts  of  the  world — with 
the  one  significant  exception  of  the  United 
States,  which,  having  entered  after  the  Civil 

60 


AN  ECONOMIC  INTERPRETATION 

War  upon  her  first  real  stage  of  nationalism,, 
turned  a  deaf  ear  to  the  preachings  of  the  Man- 
chester School. 

With  the  progress  of  the  industrial  revolu- 
tion in  the  United  States,  however,  and  with 
her  gradual  transition  from  an  exporter  of  food 
to  an  exporter  of  finished  products,  the  United 
States  was  ready  to  take  its  place  side  by  side 
with  England  in  preaching  the  gospel  of  cosmo- 
politanism and  good  will,  and  in  emphasizing 
the  forces  which  make  for  the  growth  of  inter- 
national trade.  Had  all  the  nations  of  the 
world  been  on  the  same  level  of  economic  prog- 
ress, the  very  existence  of  capital  as  an  inter- 
national force  would  have  lent  a  mighty  sup- 
port to  the  spread  of  good  feeling  and  inter- 
national fellowship.  Unfortunately,  it  was  pre- 
cisely this  equality  that  was  lacking.  In  the 
absence  of  such  a  situation,  the  exploitation  of 
the  capitalistically  undeveloped  countries  by 
the  few  nations  which  had  reached  the  third, 
stage  of  economic  nationalism,  that  of  the  ex- 
port of  capital  rather  than  of  goods,  became 
the  Seynote^of  a  new  struggle.  Thus  it  is  that 
modern  capital,  which  on  the  one  hand  works, 
toward  real  internationalism,  peace  and  public 
morality  and  which  will  ultimately  be  able  to 

61 


PROBLEMS  OF  READJUSTMENT 

accomplish  its  beneficent  results,  is  at  the  same 
time  responsible  for  the  weakening  of  inter- 
national law  and  the  revival  of  a  more  con- 
spicuous and  determined  nationalism  because 
of  the  greater  prize  to  be  achieved  and  the 
fiercer  struggle  necessary  to  win  it. 

In  the  political  life  of  the  world  today  we 
see  the  same  forces  at  work  as  in  all  life  from 
the  very  beginning — the  forces  which  we  sum 
up  under  the  terms  of  the  competitive  and  the 
cooperative  process,  the  individualistic  and  the 
collective  movement.  Just  as  the  animal  or- 
ganism was  built  up  by  a  combination  of  the 
struggle  between  the  cells  and  cooperation 
among  them ;  just  as  human  society  has  devel- 
oped through  the  advance  of  the  individual 
working  hand  in  hand  with  the  growth  of  the 
group ;  so  the  world  society  that  is  slowly  com- 
ing to  pass  is  evolving  in  obedience  on  the  one 
hand  to  the  competitive  spirit  of  national  strug- 
gle, and  on  the  other,  to  the  cooperative  forces 
of  internationalism — both  of  them  inherent  in 
the  modern,  factory  syslem,  resting  upon  indus- 
trial capitalism.  At  certain  stages  in  the 
world's  history  the  one  set  of  forces  seems  to  be 
in  the  ascendency,  at  another  stage  the  opposite 
set  j  but  in  reality  they  are  complementary  and 

62 


AN  ECONOMIC  INTERPRETATION 

are  always  working  together.  It  is  the  indus- 
trial revolution  with  the  factory  system  and  the 
growth  of  capitalism  which  has  set  in  motion 
the  mighty  forces  both  of  world  cooperation  and 
of  national  antagonism. 

In  the  light  of  what  has  been  said,  the  pres- 
ent and  the  future  of  the  United  States  form 
an  especially  interesting  subject  for  considera- 
tion. When  this  nation  was  born  it  was  for 
some  decades  weak  and  puny.  It  was  the  genius 
of  Alexander  Hamilton  which  realized  the  true 
economic  basis  of  nationality  and  which  at- 
tempted to  start  the  country  on  its  real  career. 
The  gradual  dominance  of  American  politics 
by  the  South,  the  economic  basis  of  which  was 
agricultural  rather  than  industrial,  was,  how- 
ever, responsible  for  good  as  well  as  for  eviL 
The  emphasis  upon  states '  rights  indeed  almost 
destroyed  the  Union;  but  the  need  of  a  wider 
basis  of  productivity  under  the  extensive  sys- 
tem of  slave  labor  was  responsible  for  the  Mex- 
ican War  and  the  rounding  out  of  our  imperial 
domain.  It  was  only  with  the  completion  of  the 
Civil  War  that  this  country  as  a  whole  entered 
on  the  first  real  stage  of  economic  nationalism. 
Thus  it  was  that  the  United  States,  following 
the  example  of  Great  Britain  a  century  before, 

63 


PROBLEMS  OF  READJUSTMENT 

"built  up  an  enormous  industrial  power  through, 
a  system  of  national  protection.  We  are  now 
just  beginning  to  reach  the  stage  attained  by 
Great  Britain  three  generations  ago,  the  stage, 
namely,  of  transition  from  the  export  of  agri- 
cultural products  to  that  of  the  import  of  agri- 
cultural produce  and  the  export  of  manufac- 
tured products.  We  have  not  yet  reached,  and 
it  may  well  be  at  least  another  generation  be- 
fore we  reach,  the  third  stage  of  economic  na- 
tionalism, that  of  the  export  of  capital  on  a 
large  scale  as  the  typical  form  of  profitable 
enterprise.  When  we  reach  that  third  stage, 
which,  as  we  have  seen,  carries  with  it  the 
struggle  for  the  exploitation  of  the  relatively 
undeveloped  parts  of  the  world,  our  real  trial 
will  come,  and  the  true  conflict  between  nation- 
alism and  internationalism  will  begin.  Then, 
and  then  for  the  first  time  since  the  develop- 
ment of  our  national  forces,  shall  we  have  an 
opportunity  to  test  the  foundation  of  our  his- 
toric friendship  with  Great  Britain.  Then,  and 
then  for  the  first  time,  will  the  situation  arise 
when  Great  Britain,  instead  of  being  bound 
solidly  to  us  by  the  bonds  of  her  financial  in- 
terest in  us,  will  face  the  United  States  as  a 
rival,  a  rival  on  the  international  market  for 

64 


AN  ECONOMIC  INTERPRETATION 

the  control  of  the  capitalistically  undeveloped 
countries.  Whether  by  that  time  the  forces  of 
internationalism  will  prevail  and  good  will  and 
peace  continue,  or  whether,  on  the  other  hand, 
the  United  States  will  be  impelled,  perhaps 
against  her  will,  to  take  the  place  now  occupied 
by  Germany,  can  be  foretold  by  no  one. 

Finally  it  may  be  asked  what  is  to  be  the 
outcome  of  all  this?  Are  wars  to  go  on  for- 
ever? Is  the  present  struggle,  gigantic  though 
it  be,  simply  a  forerunner  of  wars  still  more 
gigantic?  Or,  on  the  other  hand,  are  the 
dreams  of  our  pacificists  to  become  true,  and  is 
universal  peace  to  be  realized? 

If  there  is  any  truth  in  the  preceding  analy- 
sis, both  of  these  things  are  coming  in  the  full- 
ness of  time.  That  is,  we  are  to  have  more 
wars,  but  we  are  to  have  ultimate  peace.  The 
reason  that  we  are  to  have  more  wars  is  simply 
because  of  the  fact  that  what  we  call  the  indus- 
trial revolution  is  in  reality  only  a  gradual 
change,  and  that  this  change  is  but  slowly  per- 
meating the  world.  That  part  of  the  earth's 
surface  which  is  occupied  by  countries  with  a 
highly  developed  industrial  capitalism  is  rela- 
tively small.  Although  capitalism  is  spreading 
throughout  the  West  and  South  of  the  United 

65 


PROBLEMS  OF  READJUSTMENT 

States  and  effecting  a  lodgment  in  Canada  and 
Japan  and  Eussia,  it  is  only  beginning  in  the 
rest  of  Asia  and  Africa  as  well  as  in  South 
Ajnerica  and  Australia.  As  long  as  there  are 
vast  stretches  of  territory  still  waiting  to  be 
developed,  so  long  will  they  prove  to  be  a  lure 
to  the  industrially  advanced  nations  of  the 
world.  England,  and  to  a  much  less  extent 
France,  have  until  recently  provided  this  capi- 
tal. "Whatever  be  the  outcome  of  the  present 
war,  however,  nothing,  if  our  analysis  is  cor- 
rect, can  check  the  ultimate  tendency  of  coun- 
tries like  Germany,  and  later  on  Japan  and 
the  United  States,  to  be  followed  still  later  by 
other  countries,  to  secure  their  share  of  these 
lucrative  opportunities.  Whatever  may  be  the 
immediate  results  of  the  present  situation,  or 
with  whatever  great  success  the  attractive  and 
even  noble  ideal  of  an  imperial  British  federa- 
tion may  be  realized,  England  can  scarcely  ex- 
pect in  the  long  run  to  retain  the  monopoly  or 
the  domination  which  it  has  achieved  and  which 
it  built  up  during  the  nineteenth  century  as  a 
result  of  the  lucky  accident  of  being  the  first 
country  to  experience  the  industrial  revolution 
and  to  exploit  her  coal  supply.  England's  pri- 
macy was  no  doubt  deserved,  and  is  assuredly 

66 


AN  ECONOMIC  INTERPRETATION 

welcome  to  many  of  us ;  but  from  the  point  of 
view  of  world  forces,  it  is  difficult  to  resist  the 
conclusion  that  it  also  is  destined  to  disappear. 
Eome  was  able  to  create  a  world  empire  and  to 
maintain  it  for  several  centuries  because  there 
was  no  economic  expansiveness  in  the  outlying 
constitutent  members  of  the  empire.  Great 
Britain  will  find  it  far  more  difficult  to  create 
a  world  empire  permanently  dominating  all 
other  countries,  for  the  simple  reason  that  in- 
dustrial capitalism  is  destined  to  overrun  the 
world.  Even  today  England  is  able  to  retain 
India  only  by  strict  commercial  control  and  by 
sedulously  preventing  the  growth  of  any  na- 
tional industry  in  that  huge  empire. 

The  above  forecast  as  to  the  probability  of 
the  continuance  of  war  rests  indeed  on  an  as- 
sumption that  may  be  challenged.  It  might  be 
urged  that  civilization  is  progressing  so  rapidly 
that  the  nations  of  the  future  will  realize  the 
economic  waste,  the  inexpressible  horror,  and 
the  irreparable  ravages  of  war,  and  that  com- 
mon decency  and  ordinary  humanity  will  impel 
the  world  into  an  abandonment  of  what  is  essen- 
tially the  mark  of  savagery.  However  deeply 
and  even  passionately  we  may  desire  such  a 
consummation,  it  must  be  confessed,  in  all  hu- 

67 


mility,  there  seems  to  be  slight  warrant  for  its 
expectation.  If  indeed  the  chief  nations  of  the 
world  were  to  abandon  all  efforts  to  secure  sel- 
fish advantage  for  themselves;  if  an  interna- 
tional pact  could  be  arranged  so  that  each  na- 
tion would  cheerfully  divide  its  opportunities 
with  its  neighbors,  and  would  welcome  the  en- 
trance of  continually  new  claimants  into  the 
agreement ;  if,  in  other  words,  generosity  were 
to  replace  selfishness  in  national  arrangements, 
the  outlook  might,  indeed,  be  very  different. 
But  with  the  frailty  of  human  nature,  as  it  un- 
fortunately still  exists ;  with  the  undoubted  na- 
tional consciousness  which  is  suffused  at  pres- 
ent with  the  distinctively  modern  emphasis 
upon  the  importance  of  the  material  basis  of 
the  higher  life;  and  above  all  with  the  oppor- 
tunity afforded  to  each  nation  to  reach  out  for 
its  share  of  almost  boundless  prosperity  by 
grasping  the  new  opportunities  afforded  to 
modern  capitalism,  it  seems  hopeless  to  expect 
any  effective  resistance  to  a  temptation  which 
is  so  compelling,  so  illimitable,  and  so  promis- 
ing of  success  under  the  conditions  of  actual 
economic  life.  No  more  striking  illustration  of 
the  real  forces  that  dominate  the  foreign  policy 
of  modern  nations  can  be  found  than  the  vain 

68 


AN  ECONOMIC  INTERPRETATION 

effort  recently  made  by  certain  Italian  states- 
men to  repress  the  popular  feeling  and  to  pre- 
vent their  country  from  joining  a  war  the  hor- 
rors of  which  had  been  for  months  clearly  be- 
fore the  eyes  of  all.  Pacificism  seems  destined, 
for  the  near  future  at  least,  to  remain  an  unat- 
tainable ideal;  for  it  is  both  blind  and  deaf  to 
the  effect  of  modern  capitalism  in  accentuating, 
rather  than  attenuating,  the  lure  of  the  eco- 
nomic life. 

But  if,  then,  we  are  likely  to  see  during  the 
next  few  generations  wars  on  an  even  greater 
scale  than  the  present  one,  will  this  endure  for- 
ever ?  Not  if  our  analysis  is  correct.  For  when 
once  the  time  comes  that  industrial  capital  will 
have  spread  to  the  uttermost  parts  of  the  earth ; 
when  China  and  India  and  Africa  and  the  rest 
will  all  havfe  been  as  fully  supplied  with  capital 
as  are  now  Great  Britain  and  Belgium  and  Ger- 
many; when,  in  other  words,  the  industrial 
revolution  will  have  permeated  the  world,  then 
the  economic  basis  will  have  been  laid  for  two 
supreme  events.  In  the  first  place,  there  will 
no  longer  be  any  exploitation  of  the  backward 
countries,  because  there  will  be  no  industrially 
undeveloped  countries  to  exploit.  Then  the 
whole  world  will  be  divided  up  into  a  series  of 

69 


PROBLEMS  OF  READJUSTMENT 

empires,  perhaps  a  dozen  or  more,  on  a  level 
of  comparative  equality  economically,  and 
therefore  politically.  With  snch  a  relative 
equality  of  industrial  development,  and  in  the 
absence  of  any  important  foreign  territory  to 
be  exploited,  each  nation  will  then  find  it  to  its 
interest  to  develop  what  is  best  within  itself  in 
order  to  carry  on  a  peaceful  exchange  of  com- 
modities with  the  other  nations.  Then,  and 
then  only,  will  Adam  Smith's  dream  be  realized, 
namely,  that  each  nation  will  be  able  to  utilize 
its  own  climatic  and  other  economic  advantages 
in  a  peaceful  struggle  with  other  nations. 
Then,  and  then  only,  will  universal  free  trade 
become  profitable  to  all,  and  the  rule  of  inter- 
national amity  become  enduring.  Then,  and 
then  only,  shall  we  have  the  secure  foundation 
laid  for  the  world  republic  and  for  the  coopera- 
tion of  all  races  and  of  all  peoples  toward  a 
common  ideal. 

In  the  second  place  is  the  industrial  revo- 
lution. Just  as  the  industrial  revolution 
changed  England  from  an  aristocracy  to  a 
democracy,  just  as  the  industrial  revolution  in 
the  United  States  is  re-creating  a  new  South  on 
a  democratic  basis,  so  the  spread  of  the  indus- 
trial revolution  will  bring  democracy  through- 

70 


AN  ECONOMIC  INTERPRETATION 

out  the  world  and  will  enable  every  country  to 
turn  its  efforts  to  the  ideals  of  a  political  and  a 
social  democracy.  Then  we  shall  not  have  to 
spend  more  money  for  dreadnoughts  than  we 
do  for  social  progress. 

To  predict  how  soon  this  change  will  come 
about  is  idle.  All  that  can  be  said  is  that  the 
change  is  in  progress,  and  that  in  this  change 
there  seems  to  lie  the  chief  hope  of  the  world's 
future.  What  the  particular  economic  organi- 
zation of  the  future  is  to  be,  it  is  not  the  pur- 
pose of  these  pages  to  discuss.  My  point  will 
have  been  attained  if  we  clearly  keep  in  mind 
the  inevitable  spread  of  industrial  capitalism, 
irrespective  of  the  fact  by  whom  the  capital  is 
to  be  controlled.  Capitalism  on  an  interna- 
tional scale  may  well  lead  during  the  next  few 
decades  to  a  strengthening  of  certain  forms  of 
international  cooperation  and  fellowship,  so 
ardently  desired  by  all  forward-looking  think- 
ers. But  industrial  capitalism  will  not  have  / 
completed  its  allotted  task  until  it  shall  have 
brought  about  the  reign  of  national  economic 
equality  which  alone  will  serve  as  the  basis  of  an 
enduring  internationalism.  ^  Whatever  may  be 
the  influence  of  the  other  factors,  ponderable  or 
imponderable,  that  contribute  to  civilization,  it 


PROBLEMS  OF  READJUSTMENT 

is  scarcely  open  to  doubt  that  the  dominant 
forces  which  are  actually  molding  history  to- 
day are  primarily  economic  in  character,  and 
are  as  a  consequence  intimately  associated  with 
the  great  transition  that  is  at  present  taking 
place  in  the  economic  organization  of  the  world. 
Unless  the  present  conflict  is  studied  in  the  light 
of  these  world  forces,  its  lesson  will  not  have 
been  read  aright. 


Ill 

THE  CRISIS  IN  SOCIAL  EVOLUTION 
FBANKLIBT  H.  GIDDINGS 

For  two  or  three  months  after  the  war  began, 
everybody  was  asking  or  telling  who  was  to 
blame.  The  primitive  human  instinct  to  hold 
some  one  personally  accountable  had  asserted 
itself  in  full  strength.  Then,  for  two  or  three 
months  more,  every  one  plunged  into  a  discus- 
sion of  the  "causes"  of  the  war.  Agreement 
about  causes  proved  to  be  no  more  possible 
than  unanimity  in  fixing  responsibility.  Doubt- 
less in  his  heart  every  one  felt  bitterly  toward 
some  potentate  or  people,  while  in  his  intel- 
lectual centers  he  may  have  cherished  a  firm 
conviction  that  his  own  theory  of  causation 
was  the  only  true  one.  Perhaps  everybody  was 
right,  and  only  couldn't  prove  it.  You  know 
what  the  Scriptures  say — or  was  it  Don 
Marquis  f — 

73 


PROBLEMS  OF  READJUSTMENT 

All  the  wicked  cities 

In  the  Vale  of  Siddim 
Thought   of  things   they   shouldn't   do — 

Then  they  went  and  did  'em! 

Like  enough  this  simple  hypothesis  is  as  far  as 
we  shall  ever  get  in  explaining  how  the  trouble 
began. 

Of  late,  the  speculations  of  the  thoughtful 
have  turned  toward  the  future.  How  will  the 
world  henceforth  be  different  because  this  ca- 
lamity came  upon  it?  Civilization  is  set  back 
we  all  believe — but  to  what  extent  and  in  just 
what  way?  The  destruction  of  commerce  and 
the  loss  of  life  every  one  sees  and  thinks  he 
understands.  The  waste  of  capital  is  realized 
by  some.  The  irreparable  loss  to  art  and  to 
science  is  appreciated  by  the  few.  And  beyond 
this  destruction,  which  is  immediate  and  al- 
ready is  felt,  processes  of  selection  and  rear- 
rangement have  been  set  going  which  will  con- 
tinue to  affect  the  quality  and  the  happiness 
of  mankind  throughout  future  time.  May  I  ask 
your  attention  to  one  or  two  considerations, 
rather  elementary  I  fear,  touching  these  trans- 
forming changes  that  are  likely  to  continue. 

It  is  commonly  held  that  modern  war  undoes 

74 


THE  CRISIS  IN  SOCIAL  EVOLUTION 

the  work  of  a  beneficent  natural  selection.  The 
best,  we  say,  are  killed;  and  the  race  must  be 
perpetuated  by  its  weaklings. 

If  this  is  true,  or  in  so  far  as  it  may  be  true, 
a  war  so  gigantic  as  the  one  now  being  waged 
must  be  regarded  as  the  most  appalling  calam- 
ity that  has  overtaken  mankind  from  the  begin- 
ning. Gains  of  half  a  million  years  have  been 
buried  in  the  trenches,  or  withered  by  the  fire 
of  artillery.  Surely  a  hypothesis  so  terrible 
should  be  subjected  to  searching  scrutiny  before 
it  is  accepted. 

It  is  true,  of  course,  that  war  takes  the  phys- 
ically fit,  and  takes  more  of  the  young  in  the 
prime  and  vigor  of  life  than  of  the  old.  It  is 
true,  also,  that  death  takes  a  heavy  toll  of  the 
bravest  and  most  intellectual  of  these  young 
men,  whose  courage  and  abilities  have  won  them 
commissions  as  officers;  who,  whatever  orders 
from  above  may  be,  spare  their  men  whenever 
they  can,  and  recklessly  sacrifice  themselves.  If 
this  were  the  whole  story,  we  could  not  escape 
the  pessimistic  conclusion.  But  there  is  some- 
thing more  to  be  said. 

How  many  of  the  men  who  fall  in  battle  die 
childless,  and  how  many  leave  offspring?  Who 
knows !  Yet  plainly,  until  this  question  can  be 

75 


PROBLEMS  OF  READJUSTMENT 

answered  it  is  absurd  to  assume  that  the  course 
of  natural  selection  is  diverted  by  war.  The 
one  fact  that  can  be  affirmed  with  certainty  is 
that  a  large  proportion  of  the  victims  of  battle 
do  leave  children,  legitimate  or  illegitimate. 
Since  this  present  war  began,  a  large  number  of 
hastened  marriages  have  been  made  in  all  the 
belligerent  countries;  and  the  certainty  of  an 
extraordinary  birth-rate  in  the  summer  of  1915 
has  necessitated  measures,  both  governmental 
and  voluntary,  for  rendering  extraordinary  as- 
sistance to  destitute  young  mothers. 

Again,  the  men  who  are  killed  in  battle  even 
in  the  present  war,  which  probably  is  excep- 
tional in  this  respect,  are  not  the  only  important 
harvest  of  death.  In  all  wars  of  which  we  have 
record,  disease  has  claimed  more  victims  than 
bullets.  And  in  death  by  disease  there  is  always 
natural  selection.  While  cholera,  typhus,  ty- 
phoid and  pneumonia  take  the  strong  no  less 
than  the  weak,  no  one,  I  suppose,  will  deny 
that  when  all  allowances  have  been  made  it  is 
the  relatively  weak  or  non-resisting  that  are 
carried  off  in  larger  numbers. 

These  considerations  surely  put  a  question- 
mark  against  the  assertion  that  war  gives  us 
an  adverse  natural  selection.  And  these  con- 

76 


THE  CRISIS  IN  SOCIAL  EVOLUTION 

siderations  are  only  the  more  obvious  ones. 
Another,  and  probably  far  more  important  one, 
although  we  almost  never  hear  it  mentioned,  is 
the  intensified  struggle  for  existence  among  the 
non-combatants.  Hardships  are  multiplied, 
food  is  inadequate,  doctors  and  nurses  are  at 
the  front,  anxiety  and  sorrow  bring  tortured 
nerves  to  the  breaking-point.  Under  these  cir- 
cumstances, natural  selection  has  its  way  to  a 
degree  approaching  the  remorseless  elimination 
of  the  relatively  weak  which  we  are  accustomed 
to  associate  with  the  jungle,  or  at  least  with 
savagery  and  barbarism. 

In  particular,  women  and  children  suffer. 
It  is  most  curious  that  those  who  uncritically 
take  for  granted  the  adverse  natural  selection 
of  war  never  let  their  imagination  wander 
beyond  the  battlefield  and  the  male  combatants 
assembled  there.  Would  it  not  be  well,  before 
accepting  any  conclusion  on  this  subject,  to  ask 
for  the  death-rates  of  women  and  children  dur- 
ing war  years  and  immediately  after?  Unfor- 
tunately we  lack  adequate  statistics;  but  what 
scientific  man  can  ignore  the  plain  implication 
of  the  facts  that  are  available  f  The  death-rate 
of  women  and  children  in  such  times  is  so  much 
higher  than  in  normal  times  of  peace  that  it  is 

77 


PROBLEMS  OF  READJUSTMENT 

impossible  for  any  observer  to  be  unaware  of 
it,  although  he  has  no  figures — as  impossible  as 
it  would  be  to  be  unaware  of  an  epidemic  or  of 
an  extraordinary  succession  of  funeral  proces- 
sions in  a  village  street. 

With  some  diffidence  I  venture  to  offer  as  my 
own  conclusion  a  bit  of  pure  skepticism.  I  seri- 
ously doubt  whether  war  greatly  affects  the 
normal  course  of  natural  selection.  In  any 
case,  the  assertion  that  it  does,  is  not  proven. 

Natural  selection  in  the  strict  biological 
meaning  of  the  term  is  closely  simulated  by  a 
selection  always  going  on  in  the  realm  of  human 
habits,  ideas,  inventions,  morals,  laws,  and  po- 
litical institutions.  The  wiser  students  of  social 
evolution  do  not  undertake  to  say  how  far  these 
phenomena  of  behavior  and  relationship  are 
products  of  unconscious  activities,  how  far  of 
man's  conscious  planning  and  reasoned  en- 
deavor. Either  way  they  are  products  of  the 
struggle  for  existence  carried  on  collectively — 
by  human  beings  living  in  groups,  facing  com- 
mon dangers,  making  common  cause,  working 
together. 

As  the  individual  struggle  for  existence  is 
successful  for  some  and  fateful  for  others, 

78 


THE  CRISIS  IN  SOCIAL  EVOLUTION 

thereby  eliminating  not  only  the  unsuccessful 
individuals  themselves,  but  also  in  the  course 
of  time  whole  varieties  or  kinds ;  so  the  group 
or  collective  struggle — successful  often  for 
whole  aggregations  and  fateful  for  others — has 
from  the  appearance  of  mankind  on  the  earth 
until  now  been  destroying  habits,  purposes,  cus- 
toms and  policies  correlated  with  unsuccess, 
and  preserving  and  establishing  policies,  rela- 
tions and  habits  correlated  with  success. 

Whether  war  or  peace  in  the  long  run  plays 
the  larger  part  in  social  selection  is  another 
question,  upon  which  the  wiser  students  of  hu- 
man progress  will  not  offer  too  positive  an 
opinion.  But  it  is  not  rash  to  say  that  every 
war  has  destroyed  many  things  beside  human 
life  and  material  wealth,  beyond  possibility  of 
recovery  or  reproduction.  Often  the  destruc- 
tion is  unobserved  for  years,  or  even  genera- 
tions, after  hostilities  have  ceased.  The  habit 
or  institution  so  eliminated  is  not  usually  as 
conspicuous  as  American  Negro  slavery;  but 
the  passing  of  uncounted  social  phenomena  of 
lesser  magnitude  may  have  cumulative  results 
quite  as  important  as  the  crushing  of  any  one 
great  institution. 

With  all  its  uncertainties,  history  is  less 
79 


doubtful  than  prophecy,  and  it  is  easier  to  see 
the  process  of  social  selection  in  historical 
retrospect  than  to  visualize  its  future  conse- 
quences. Nevertheless,  a  war  has  this  merit  as 
a  datum  for  intellectual  speculation :  it  is  a  two- 
sided  conflict — it  presents  alternatives.  It  was 
not  easily  possible  to  be  muddle-headed  about 
what  would  happen  if  the  Saracens  or  the  Huns 
conquered  Europe ;  about  what  would  happen  if 
Great  Britain  subdued  the  American  colonies, 
or  the  Southern  Confederacy  made  good  its 
secession. 

The  present  war  is  more  than  a  conflict  of 
nations.  It  is  a  struggle  between  different  civi- 
lizations. It  will  not  result  in  the  destruction  of 
either  civilization,  or  perhaps  of  any  nation, 
even  Belgium.  But  the  outcome  will  give  to  one 
civilization  or  the  other  a  long  lead.  It  will 
discourage,  handicap,  and  presently  destroy 
many  of  the  factors  or  elements  that  make  up 
the  defeated  civilization,  imparting  to  it  its 
characteristic  qualities. 

It  is  the  boast  of  Germany  that  her  people 
are  homogeneous,  a  relatively  pure  stock.  The 
claim  may  be  allowed  if  we  confine  attention  to 
the  strictly  European  elements  that  are  blended 

80 


THE  CRISIS  IN  SOCIAL  EVOLUTION 

in  German  blood,  properly  so  called.  The  boast 
is  altogether  untrue  if  the  entire  population  of 
the  empires  in  question  is  taken  into  account; 
and  this  discrimination,  as  will  appear,  is  the 
key  to  any  thoroughgoing  explanation  of  the 
profound  difference  between  German  civiliza- 
tion and  the  civilizations  of  France  and  Eng- 
land. 

By  comparison  with  the  German  and  Aus- 
trian empires,  the  allied  nations  are  an  old  and 
well-ripened  blend  of  all  four  of  the  great  Euro- 
pean stocks.  These  stocks  are:  the  Mediterra- 
nean— long-headed,  olive-skinned,  dark-eyed 
and  dark-haired;  the  Baltic — long-headed,  fair, 
yellow-haired  and  blue-eyed; the  Alpine — broad- 
headed,  chestnut-haired  and  gray-eyed,  a  prod- 
uct of  the  crossing  of  Mediterraneans  with 
round-heads  from  the  Armenian  parts  of  Asia, 
who  made  their  way  across  Europe  along  the 
southern  foothills  of  the  Alps;  and  the  Danu- 
bians — broad-headed,  florid,  red-haired  and 
gray-eyed,  a  product  of  the  crossing  of  Baltics 
with  Asian  round-heads  that  pushed  across 
Europe  by  way  of  the  Danube  and  Rhine  val- 
leys, the  northern  foothills  of  the  Alps  and  so 
into  Belgium  and  England,  where  they  became 
historically  known  as  Belgae  and  Britons.  The 

81 


PROBLEMS  OF  READJUSTMENT 

French  and  English  have,  of  course,  in  their 
composition  a  much  higher  percentage  of  Medi- 
terranean blood  than  the  Germans  have.  While 
it  is  not  quite  accurate  to  identify  this  blood 
with  the  so-called  Latin  race,  it  is  a  physical 
basis  of  the  Latin  culture.  In  the  Austrian 
and  German  empires,  on  the  other  hand,  there 
are  large  groups  of  Asian  elements  far  less 
well  blended  with  European  stocks  than  is  any 
element  found  in  the  population  of  France  or 
of  England.  The  Lapps,  Finns,  and  Slavs  with 
which  German  blood  is  crossed  in  Prussia,  the 
Esthonians,  Magyars  and  Huns  which  have 
managed  to  keep  separate  from  the  Germans  in 
Austria,  have,  all  in  all,  made  the  population  of 
the  German  and  the  Austrian  empires  much 
more  of  a  merely  mechanical  mixture  of  unas- 
similable,  or  at  any  rate  unassimilated,  factors 
than  are  the  populations  of  France  and  Eng- 
land. 

No  argument  is  needed  to  prove  that  popula- 
tions composed  of  elements  that  neither  amal- 
gamate to  any  great  extent  through  inter-mar- 
riage, nor  assimilate  mentally  or  morally 
through  imitation  of  one  another's  habits,  ac- 
ceptance of  one  another's  beliefs  and  ideas,  and 
adoption  of  one  another 's  purposes,  can  achieve 

82 


THE  CRISIS  IN  SOCIAL  EVOLUTION 

political  cohesion  in  one  way  only:  they  may 
be  held  compact  by  the  strong  hand  of  militar- 
istic sovereignty.  Such  sovereignty,  in  its  turn, 
may  be  the  authority  of  a  conquering  state  or 
it  may  be  the  authority  created  by  the  feder- 
ation of  states,  not  otherwise  too  friendly,  for 
defense  against  a  common  enemy.  Such  popu- 
lations engage  in  teamwork  because  they  have 
to,  not  because  they  want  to.  They  become  ac- 
customed to  command.  They  learn  to  expect 
direction,  to  have  life  planned  out  for  them. 
What  Walter  Bagehot  calls  "government  by 
discussion"  they  regard  as  both  wasteful  and 
ineffective.  A  smoothly  working  administra- 
tive machine  they  learn  to  admire  as  the  best 
of  all  machines  invented  by  man,  and  the  most 
important  instrumentality  that  functions  for 
human  well-being. 

How  different  is  the  political  cohesion  of  pop- 
ulations sufficiently  alike  or  sympathetic  enough 
to  amalgamate  readily  and  to  assimilate  inevi- 
tably! It  is  as  suggestive  of  chemical  union 
as  the  political  cohesion  of  antagonistic  popula- 
tions is  suggestive  of  the  mechanical  union  of 
molecules  under  the  impact  of  a  steam  hammer. 
At  some  time  far  back  in  their  history  the  blend- 
ing social  elements  may  have  been  dissimilar 

83 


and  hostile,  as  were  the  Pictish,  Goidelic,  Bry- 
thonic,  Saxon,  Danish,  and  Norman  elements 
which  combined  at  length  in  the  English  peo- 
ple. But  if  through  long  dwelling  side  by  side 
antagonisms  have  diminished  and  toleration 
has  prepared  the  mind  for  understanding  and 
the  heart  for  friendliness,  a  true  people  comes 
into  being.  Cooperation  is  created  by  the  meet- 
ing of  minds,  policies  are  determined  and 
shaped  by  discussion,  sovereignty  is  the  peo- 
ple's will,  government  is  ministerial  only;  per- 
sonal liberty,  individual  initiative,  private  re- 
sponsibility and  public  accountability  are  things 
of  course. 

It  will  not  do,  however,  to  assume,  without 
some  further  looking  into  things,  that  the  civili- 
zation which  is  made  possible  by  assimilation 
and  a  harmonious  blending  of  elements  once 
different,  is  on  all  accounts  better  than  a  civili- 
zation of  the  more  mechanical  sort.  Civiliza- 
tion is  a  certain  state,  quality,  and  functioning 
of  human  society,  and  all  human  society  is  a 
great  collective  enterprise.  In  the  struggle  for 
existence,  which  began  when  life  began,  group 
effort  has  played  a  part  as  large  and  far  more 
conspicuous  than  individual  effort.  The  col- 

84 


THE  CRISIS  IN  SOCIAL  EVOLUTION 

lective  struggle  for  existence  has  made  possible 
the  moral  and  the  intellectual  advance  of  man- 
kind by  establishing  relative  security,  creating 
economic  abundance,  and  putting  a  premium 
upon  the  restraints,  the  sympathies,  and  the 
mental  activities  that  are  essential  to  social  co- 
hesion and  successful  cooperation. 

To  see  the  social  problem  so,  in  its  ultimate 
nature,  shorn  of  complications  and  stripped  of 
accessories,  is  to  realize  that  any  group,  asso- 
ciation, community,  nation  or  international  or- 
ganization, achieves  the  supreme  ends  of  ex- 
istence more  or  less  fully  as  it  is  more  or  less 
efficient.  And  the  efficiency  must  comprise  both 
the  collective  efficiency  of  the  cooperating  whole 
and  the  personal  efficiency  of  the  individual 
units  whose  efforts  are  combined.  If  individual 
efficiency  only  or  collective  efficiency  only  were 
enough,  the  problem  of  the  quality  of  civiliza- 
tion as  poorer  or  better  would  be  simplified. 

This  twofold  aspect  of  efficiency  must  be 
borne  in  mind  when  we  attempt  to  appraise  the 
redoubtable  efficiency  of  Germany,  and  to  com- 
pare it  with  the  efficiency  represented  by  the 
allied  nations. 

German  efficiency  is  "made";  French,  Eng- 
lish, American  efficiency  "grows."  In  Ger- 

85 


many  under  orders  from  above  a  few  selected 
kinds  of  education  are  planned  and  organized. 
No  detail  is  neglected.  From  infancy  the  child 
is  dedicated  to  a  specific  future.  By  the  time 
he  arrives  at  years  of  discretion  he  discovers 
that  parents  and  the  state  have  left  him  small 
scope  for  choice.  He  may,  indeed,  if  of  a  more 
than  commonly  rebellious  spirit,  break  away 
from  the  scheme  of  things  into  which  already 
he  is  fitted  like  a  standardized  piece  in  a  mech- 
anism. If  he  has  been  prepared  for  shop  or 
counting-house,  in  shop  or  counting-house  he 
probably  will  abide.  His  preparation  will  have 
been  excellent,  and  the  chances  are  that  he  will 
revere  and  obey  the  state  that  so  thoughtfully 
spared  him  the  hard  task  of  shaping  his  destiny. 
If  for  the  civil  service,  the  army,  or  the  uni- 
versity he  has  been  predestined,  civil  service, 
military  life,  or  the  university  career  will  prob- 
ably claim  him,  and  hold  him  to  the  end. 

Or  perhaps  so  much  of  education  as  is  need- 
ful for  business  or  professional  life  has  been 
thought  too  precious  to  waste  on  him,  born  a 
proletarian.  The  state  does  not  therefore  over- 
look him.  He  is  told  how  much  of  his  wages 
he  must  pay  into  a  fund  to  provide  against  ac- 
cident, illness,  or  other  misfortune.  If  out  of 

86 


THE  CRISIS  IN  SOCIAL  EVOLUTION 

work,  a  state  employment  agency,  well  organ- 
ized and  effective,  will  aid  him  quickly  to  find 
new  opportunity.  If  heredity  has  been  unkind 
to  him,  or  notwithstanding  the  best  efforts  of  a 
watchful  paternalistic  state  his  childhood  has 
been  spent  among  evil  surroundings,  he  will  be 
taken  in  hand,  and  suitably  corrected  on  a  farm 
colony,  should  he  lapse  into  vagrant  ways. 

So  in  the  life  of  each  individual  much  is 
foreseen,  little  is  left  to  chance,  and  not  too 
much  to  personal  choice. 

In  the  relation  of  group  to  group,  a  like  pre- 
vision and  administrative  direction  dispose  and 
regulate.  Domestic  and  foreign  markets  are 
catalogued  and  described;  trade  routes,  ship- 
ping facilities,  credit  facilities  and  demands  are 
inventoried.  Any  important  information  that 
the  manufacturer  or  exporter  might  need  in 
his  business,  if  obtainable  at  all,  can  be  found 
in  governmental  guides  or  card  catalogues  as 
readily  as  one  finds  the  definition  of  a  word  in 
a  dictionary. 

Natural  resources  and  human  life  are  con- 
served; men  are  drilled  for  war  as  prepared 
for  peace.  Nothing  is  neglected,  nothing  left 
to  chance  and,  as  in  the  relation  of  authority  to 
the  individual,  little  is  left  to  choice. 

87 


PROBLEMS  OF  READJUSTMENT 

If  in  this  pen-and-ink  sketch  of  German  effi- 
ciency there  be  exaggeration,  it  is  an  exaggera- 
tion that  heightens  the  effect  which  the  Ger- 
man himself  admires.  It  does  not,  as  he  sees  it, 
impair  or  detract. 

Bnt  it  is  a  picture  that  may  be  compared 
with  one  that  was  painted  in  vivid  colors  by  a 
writer  whose  profound  interpretation  of  social 
evolution  was  given  to  the  world  a  full  gen- 
eration ago.  Who  can  read  Herbert  Spencer's 
imperishable  description  and  analysis  of  mili- 
tarism and  industrialism,  viewed  respectively 
as  contrasting  social  types,  without  perceiving 
that  any  account  of  German  social  efficiency  that 
could  be  written  within  limits  of  truth  would 
coincide  point  by  point  with  Spencer's  account 
of  the  militaristic,  regimented  state? 

It  is  not  to  be  denied  that  efficiency  of  the 
German  model  has  made  and  will  continue  to 
make  a  powerful  appeal  to  thoughtful  minds  in 
other  nations.  Militarism  devours  and  de- 
stroys; but  an  unbridled  individualism  also  is 
notorious  for  appalling  wastes  and  cruelties  of 
its  own. 

The  achievements  that  we  in  America  credit 
to  personal  initiative,  to  untrammeled  individ- 
ual enterprise,  put  a  strain  upon  imagination. 

88 


THE  CRISIS  IN  SOCIAL  EVOLUTION 

The  industrial  world  of  today,  the  accumula- 
tions of  capital,  man's  power  over  nature,  the 
substitution  of  heat  energy  and  electric  energy 
for  the  toil  of  human  muscles,  swift  transpor- 
tation and  the  network  of  communication 
throughout  the  earth — these  are  the  creations 
of  discoverers,  inventors,  men  of  vision  and  dar- 
ing, in  England,  France,  America  and  other 
countries  where  the  human  mind  has  worked 
freely,  swiftly,  with  amazing  grasp  and  amaz- 
ing precision,  under  liberty. 

Yet  these  achievements  have  brought  with 
them  a  new  exploitation  of  the  wage-earner,  a 
concentration  of  wealth,  an  increasing  control 
of  opportunity  by  a  plutocratic  minority,  a 
staggering  waste  of  material  resources,  and  a 
growing  menace  of  discontent.  Is  it  to  be  won- 
dered at  that  not  only  amateur  reformers,  but 
disciplined  publicists  and  seasoned  statesmen, 
too,  have  more  and  more  turned  to  the  state  for 
control  and  coordination? 

Plainly  the  superiority  of  one  or  the  other 
group  of  efficiency  factors  is  not  so  far  demon- 
strated. Is  it  demonstrable  f  Can  any  one  prove 
to  the  satisfaction  of  all  interested  parties  that 
the  German  plan  of  life  on  the  one  hand,  or 

89 


PROBLEMS  OF  READJUSTMENT 

the  French,  English  and  American  plan  on  the 
other  hand,  is  on  the  whole  and  in  the  long  run 
beyond  question  more  effective  for  the  realiza- 
tion of  economic,  moral  and  intellectual  possi- 
bilities? Or  do  we  discover  here  a  controver- 
sial question  that  admits  of  no  decisive  answer 
1 — one  over  which  men  may  endlessly  dispute 
without  result,  as  the  long  battlelines  of  Europe 
have  been  fighting  in  their  trenches  without 
important  advance  on  either  side? 

The  obvious  reply,  in  part  at  least,  to  this 
question  about  the  possibility  of  answering  an- 
other question,  is  found  in  the  reflection  that, 
since  each  of  the -plans  of  life  here  contrasted 
has  great  merits  and  great  shortcomings,  the 
development  of  each  so  as  to  incorporate  the 
good  features  of  the  other  may  hold  out  a  maxi- 
mum hope  to  mankind.  If,  for  example,  Amer- 
ica, England  and  France,  maintaining  their 
standards  of  personal  liberty,  could  yet  make 
use  of  the  administrative  organs  of  govern- 
ment, subject  to  a  democratic  control,  to  corre- 
late, coordinate,  and  regulate  the  spontaneous 
activities  of  citizens,  might  we  not  attain  the 
best  results  which  stand  to  the  credit  of  au- 
thority without  sacrificing  those  that  are  at- 
tainable only  under  liberty? 

90 


THE  CRISIS  IN  SOCIAL  EVOLUTION 

Surely  we  may  believe  that  such  a  develop- 
ment is  possible;  at  least,  we  may  believe  it 
long  enough  to  ask  whether  the  German  plan 
or  its  opposite  is  more  likely  to  develop  into 
one  more  comprehensive,  offering  a  larger  sum- 
total  of  merits  and  a  smaller  inventory  of  de- 
fects. 

Put  in  this  way,  the  problem  in  my  judgment 
is  correctly  stated,  and  can  no  longer  be  re- 
garded as  insoluble. 

One  day  since  the  war  began,  a  German  uni- 
versity docent,  arguing  with  an  American  stu- 
dent, maintained  that  Germany  is  more  demo- 
cratic than  the  United  States.  Asked  to  ex- 
plain his  meaning,  he  said :  ' '  The  German  gov- 
ernment does  more  things  for  its  people  than 
yours  does."  To  his  mind,  and,  I  suspect,  to 
the  minds  of  tens  of  thousands  of  his  compatri- 
ots, democracy  means  nothing  more  than  * '  gov- 
ernment of  the  people  for  the  people."  Of 
democracy  as  defined  by  Lincoln,  namely,  * '  gov- 
ernment of  the  people,  for  the  people  and  by  the 
people,"  they  appear  to  have  little  idea.  Un- 
less from  the  embers  and  desolation  of  war  that 
larger  conception  of  democracy  shall  arise,  and 
transform  the  Teutonic  state,  there  is  seemingly 
little  likelihood  that  it  will  be  the  Prussian  plan 

91 


PROBLEMS  OF  READJUSTMENT 

of  efficiency  organization  that  will  most  rapidly 
approximate  the  comprehensive  scheme ;  but  in 
the  minds  of  nations  that  already  have  accepted 
government  by  the  people,  for  the  people,  all 
the  factors  of  idea  and  appreciation  are  present, 
and  even  now  are  assembled,  for  the  generous 
expansion  of  democratic  policy.  Without  for- 
getting the  priceless  value  of  liberty  and  of  in- 
dividual achievement,  the  democratic  peoples 
have  rapidly  been  coming  to  a  truer  appraisal 
than  they  once  made  of  the  legitimate  func- 
tions of  law  and  administration.  Can  we  then 
doubt  that  in  these  peoples  centers  the  hope  and 
the  expectation  of  an  efficiency  in  every  way 
greater  than  any  social  efficiency  the  world  has 
hitherto  known? 

Not  if  one  final  consideration  supports  the 
presumption  so  far  established.  The  larger 
tasks  of  civilization  are  the  same  in  all  gen- 
erations, but  the  tasks  that  any  one  community 
or  group  of  communities  has  to  perform  in  pre- 
serving and  developing  civilization  are  not,  un- 
der all  circumstances  and  generation  after  gen- 
eration, unchanging.  Group  life,  like  individual 
life,  proceeds  through  adaptation  and  adjust- 
ment; and  titanic  forces,  over  which  man  has 
but  little  control  as  yet,  are  ever  creating  new 

92 


THE  CRISIS  IN  SOCIAL  EVOLUTION 

conditions  to  which  civilizations,  no  less  than 
the  humblest  plant  and  animal  organisms,  must 
adapt  themselves  under  penalty  of  death. 
Therefore  the  most  crucial  of  all  the  questions 
that  can  be  asked  about  the  relative  excellence 
of  the  two  types  of  efficiency  organization  that 
we  are  comparing,  relates  to  their  modifiability, 
under  slow-changing  demand  or  acute  crisis. 

So  long  as  the  conditions  under  which  an 
organism  lives  undergo  no  change,  the  reactions 
of  the  organism  itself  are  over  and  over  re- 
peated, without  change.  Ages  ago  reactions  of 
this  kind  became  correlated  with  the  mechan- 
ism of  heredity  in  all  the  animal  species,  includ- 
ing man.  They  are  the  original  nature  of  man, 
as  of  his  humbler  animal  kindred.  We  are 
born  with  them,  we  do  not  have  to  learn  them, 
we  call  them  instincts. 

Supplementing  his  instincts  every  individual, 
animal  or  human,  has  reactions  that  he  has 
learned  but  which,  over  and  over  repeated,  un- 
der conditions  practically  unchanging,  have  be- 
come nearly  as  automatic,  often  as  unconscious, 
as  instincts.  We  have  toilsomely  learned  how 
to  walk  and  tp  talk,  but  usually  we  are  not  con- 
scious of  the  muscular  adjustments  so  painfully 
acquired. 

93 


PROBLEMS  OF  READJUSTMENT 

But  now  and  then  the  unexpected  happens. 
Crisis  makes  havoc  with  a  complex  of  condi- 
tions that  had  undergone  no  change,  perhaps, 
for  years  or  for  ages.  Then  habits  and  in- 
stincts fail.  By  accident  or  by  a  wild  trial  and 
error,  well  nigh  like  a  beating  of  the  air,  new 
adjustments  may  be  made,  and  the  life  of  the 
individual  or  of  the  race  may  continue.  But 
if  such  new  adjustments  are  not  somehow  ar- 
rived at,  extermination  is  the  fate  of  those 
highly  perfected  instinct  and  habit  mechanisms 
that  were  working  quite  well  enough  so  long  as 
nothing  ''happened." 

In  the  human  race,  trial  and  error  have  cre- 
ated a  wonderful  apparatus,  supplementing  in- 
stinct and  habit,  whereby,  with  a  good  deal  of 
skill  and  a  large  measure  of  success,  we  meet 
the  unexpected  and  adapt  ourselves  to  it.  This 
mechanism  we  call  intellect,  or  reason.  Thanks 
to  it,  the  human  race  comes  safely  through  cri- 
sis after  crisis,  any  one  of  which  would  have 
been,  or  would  be,  the  end  of  us  all  if  we 
had  only  our  instincts  and  our  habits  to 
rely  on. 

Groups  of  individuals,  like  individuals  singly, 
live  instinctively,  or  by  instincts  supplemented 
by  habit,  to  a  great  extent.  The  communities 

94 


THE  CRISIS  IN  SOCIAL  EVOLUTION 

of  the  so-called  social  insects,  the  ants  and  the 
wasps  for  example,  are  only  instinctive,  or  pos- 
sibly only  tropic,  forms  of  cooperation.  The 
villages  of  beavers  are  communities  maintained 
and  working  by  means  of  instinct  and  habit. 
Human  societies  might  be  creations  of  instinct 
and  habit  only,  if  they  could  live  on  indefinitely 
under  unchanging  conditions.  Educational 
systems  could  by  disciplinary  methods  train 
every  individual  to  perform  certain  duties  as 
automatically  as  a  perfect  bit  of  electrical 
mechanism  works.  But  such  a  community  is 
static.  It  would  perish  at  the  touch  of  crisis  as 
surely  as  the  beaver  village  does  when  invaded 
by  the  hunter  with  a  gun. 

Five  thousand  years  of  human  experience 
have  demonstrated  that  in  crises  of  the  first 
magnitude,  of  which  wars  are  the  supreme  ex- 
amples, centralized  authority,  working  through 
a  highly  coordinated  organization,  is  vital.  From 
the  days  of  Athens  until  now  successful  wars 
have  not  been  conducted  through  incontinent 
resort  to  recall  and  referendum.  But  against 
this  indisputable  fact  stands  a  vast  accumula- 
tion of  evidence  that  over  and  over  again  battles 
and  campaigns  have  been  lost  through  a  stupid 
adherence  to  tradition,  through  overtraining, 

95 


PROBLEMS  OF  READJUSTMENT 

through  lack  of  individual  discretion  and  fail- 
ure of  initiative.  Even  in  militarism,  then,  it 
seems,  where  central  direction  is  essential,  the 
traits  that  are  correlated  with  liberty  are  not 
negligible. 

If  altering  conditions  do  not  take  the  form 
of  acute  crisis,  but  are  rather  a  fairly  rapid 
transformation  of  circumstance  or  environ- 
ment, centralized  authority  may  be  of  relatively 
little  value;  while  plasticity  of  mind,  modifia- 
bility  of  habit,  the  passion  to  explore  and  to 
discover,  inventiveness,  and  individual  willing- 
ness to  take  responsibility,  are  commonly  the 
factors  of  successful  readjustment.  The  most 
enlightening  example  that  history  affords  is  the 
United  States.  Here  a  people,  inheriting 
from  the  Old  World  a  rich  legacy  of  European 
custom  and  tradition,  has  adapted  itself,  first 
to  the  wilderness  and  the  plain,  then  to  state 
and  national  political  organization  under  ex- 
perimental conditions,  and  now  to  a  stupendous 
industrial  activity,  to  the  most  intense  and  ex- 
tended urban  life  that  has  thus  far  appeared  in 
the  world,  and  to  the  responsibility  of  world  in- 
fluence. There  has  been  no  break  in  continuity, 
great  crises  have  successfully  been  met,  a  re- 
sponsible, instead  of  a  despotic,  centralized  con- 

96 


THE  CRISIS  IN  SOCIAL  EVOLUTION 

trol  has  been  developed,  yet  liberty  and  in- 
dividual initiative  have  been  preserved. 

So  once  more  we  arrive  at  the  general  conclu- 
sion that  the  efficiency  plan  which  offers  a  maxi- 
mum of  merits  with  a  minimum  of  demerits, 
which  above  all  meets  the  requirements  of  our 
modern  world  of  incessant  change,  is  the  one 
that  is  naturally  evolved  by  democracy,  having 
the  energetic,  responsible,  inventive  individual 
as  its  force-generating  unit,  but  creating  or- 
ganization and  strengthening  central  control  as 
the  need  arises. 

Such  are  the  elements,  such  the  ideals,  such 
the  efficiency,  of  the  contrasting  civilizations 
now  arrayed  in  mortal  conflict.  In  one  or  the 
other,  every  people  of  the  world  places  its  hope 
and  its  faith.  Each  is  meeting,  as  best  it  can, 
the  supreme  test.  We  are  witnessing  the  most 
gigantic,  the  most  fateful  trial  and  error  ex- 
periment since  human  life  began. 


IV 


THE   EELATION   OF   THE   INDIVIDUAL 
TO  THE  STATE 

WESTEL  W.  WILLOUGHBY 

To  the  political  philosopher  that  which  gives 
extraordinary  significance  to  the  great  struggle 
now  taking  place  in  Europe  is  that,  critically 
viewed,  it  exhibits  a  contest  between  divergent 
and,  in  the  main,  contradictory  conceptions  of 
the  nature  of  the  state,  of  its  ends,  and  of  the 
relation  which  exists  between  it  and  the  individ- 
uals subject  to  its  authority.  Whatever,  there- 
fore, may  be  the  practical  outcome  of  the  pres- 
ent war,  its  influence  upon  political  theories 
is  certain  to  be  great.  The  distinctive  differ- 
ences between  the  political  views  officially  de- 
clared in  Germany  and  those  popularly  held 
in  England  and  her  Dominions,  in  France  and 
the  United  States  will  have  been  made  clear, 
and  the  results  to  which  they  lead  demonstrated 
in  deed.  It  will  be  noticed  that  I  have  spoken 

98 


THE  INDIVIDUAL  AND  THE  STATE 

in  the  one  case  of  the  opinions  officially  held, 
and  in  the  other  of  the  doctrines  popularly  cur- 
rent. This  difference  in  characterization  would 
seem  to  be  justified,  for  the  German  view,  al- 
though accepted  by  practically  the  entire  peo- 
ple, is  one  which  in  its  source  and  in  the  means 
Toy  which  it  has  been  spread,  justifies  the  title 
which  has  been  given  it.  These  ideals  which  are 
described  as  peculiarly  German  have  in  fact 
been  the  product  of  Prussian  thought  and  ex- 
perience. Inasmuch,  however,  as  they  have  be- 
come controlling  throughout  the  Empire,  they 
may  fairly  be  spoken  of  as  German  rather  than 
Prussian.  How  far  these  theories  may  prop- 
erly be  spoken  of  as  characteristic  of  Austro- 
Hungarian  thought  it  is  not  necessary  to  con- 
sider. The  Dual  Kingdom  has  had  domestic 
problems  and  international  ambitions  which  ex- 
plain her  actions  independently  of  a  political 
philosophy  such  as  is  needed  to  give  meaning 
and  logical  coherence  to  the  actions  and  utter- 
ances of  Germany;  and  it  would  seem  that 
Germany  has  utilized  the  ambitions  of  her  ally 
to  obtain  her  cooperation  in  the  realization  of 
her  own  Weltpolitik.1 

1  Austria-Hungary   is   of   course   predominantly   Roman 
Catholic,  and  Rohrbach  asserts  that  there  is  a  natural  con- 

99 


PROBLEMS  OF  READJUSTMENT 

Finally,  it  may  be  said  that  in  this  chapter  I 
shall  not  attempt  by  quotations  from  official  and 
professional  writings  to  demonstrate  the  cor- 
rectness of  the  analysis  I  shall  make  of  the 
political  conceptions  that  are  and  for  some 
years  have  been  dominant  in  Germany.  I  be- 
lieve that  I  shall  make  an  accurate  statement  of 
them,  but  as  to  this  fact  the  reader  will  have 
to  satisfy  himself  by  an  examination  of  the 
source  material,  of  which  an  abundance  now  ex- 
ists in  English  translation. 

It  cannot  be  said  that  the  ante-bellum  polit- 
ical philosophy  of  England  and  her  allies  had 
been  so  clearly  and  definitely  worked  out  as 
had  that  of  Germany.  At  any  rate,  it  had  not 
become  articulate  in  the  English  official  and 
professional  mind,  and  employed  as  an  argu- 
ment and  guide  for  national  and  imperial  ac- 
tion. But,  though  not  often  explicitly  uttered, 
this  philosophy  has  existed  in  the  thought  of  the- 
people  and  has  directed  constitutional  practice 
and  international  action  and,  since  the  outbreak 
of  the  war,  the  English  and  those  who  have 
sympathized  with  them  have  been  led  to  search 
their  own  political  minds  and  to  state  more  defi- 

flict  between  Catholicism  and  the  national  idea  of  a  State 
such  as  Prussia  stands  for. 

100 


THE  INDIVIDUAL  AND  THE  STATE 

nitely  and  possibly  more  emphatically  than  they 
have  ever  done  before,  their  own  political  ideals. 
Certain  it  is  that  the  English  have  earnestly 
sought  to  make  evident  to  all,  to  themselves 
as  well  as  to  neutrals,  that  the  present  war 
is,  at  the  bottom,  a  contest  between  contradic- 
tory and  rival  conceptions  of  the  state  and  of 
public  right,  and  that  it  is  one  in  which  all  peo- 
ples, aside  from  their  immediate  territorial  or 
commercial  interests,  are  vitally  interested. 

The  relation  of  the  individual  to  the  state 
may  be  viewed  in  three  main  aspects.  In  the 
first  place,  there  is  the  question  as  to  the  ex- 
tent to  which  the  welfare  of  the  one  is  con- 
sidered as  indissolubly  bound  up  in  the  welfare 
of  the  other.  In  the  second  place,  there  is  the 
question  as  to  the  extent  to  which  and  the  man- 
ner in  which  the  individual  may  claim  the  right 
or  be  granted  the  privilege  of  determining  the 
form  of  political  government  which  shall  exist, 
of  selecting  those  who  shall  operate  it,  and 
of  controlling  what  they  shall  do.  In  the  third 
place,  there  is  the  question  as  to  the  sphere  of 
governmental  action ;  that  is  to  say,  of  the  ex-  . 
tent  to  which  public  control  and  operation  shall 
be  substituted  for  individual  liberty  of  action. 
These  are  distinct  topics  and  need  to  be  sep- 

101 


PROBLEMS  OF  READJUSTMENT 

arately  considered;  first  we  shall  consider  the 
relation  of  public  and  private  welfare. 

During  the  distinctly  monarchical  period  in 
Europe  and  lasting  until  the  end  of  the  eigh- 
teenth century,  a  theory  was  held  and  widely 
practiced  according  to  which  the  welfare  of  the 
subjects  was  absolutely  subordinated  not  so 
much  to  the  welfare  of  the  state  as  to  that  of 
their  rulers;  or,  to  put  it  in  another  way,  the 
welfare  of  the  state  was  identified  with  the  per- 
sonal welfare  of  its  rulers,  and  the  interests  of 
the  people  subordinated  to  both.  The  state  to- 
gether with  its  people  and  their  property  were 
regarded  as  the  personal  property  of  the  ruler 
to  be  disposed  of  as  he  might  see  fit.  In  his 
"Four  Georges"  Thackeray  tells  us  how  the 
Duke  of  Hanover  sold  to  the  seigniory  of  Ven- 
ice sixty-seven  hundred  of  his  subjects,  of  whom 
only  fourteen  hundred  ever  saw  their  homes 
again,  the  proceeds  of  the  sale  being  devoted  to 
the  satisfaction  of  the  royal  duke's  sensual 
pleasures.  "Bound  all  that  Eoyal  splendor," 
writes  Thackeray,  "lies  a  nation  enslaved  and 
ruined ;  there  are  people  robbed  of  their  rights 
• — communities  laid  waste — faith,  justice,  com- 
merce trampled  upon  and  well-nigh  destroyed 
— nay,  in  the  very  center  of  Eoyalty  itself,  what 

102 


THE  INDIVIDUAL  AND  THE  STATE 

horrible  stains  of  meanness,  crime  and  shame ! 
It  is  but  to  a  silly  harlot  that  some  of  the  noblest 
gentlemen  and  some  of  the  proudest  women  in 
the  world  are  bowing  down ;  it  is  the  price  of  a 
miserable  province  that  the  King  ties  in  dia- 
monds round  his  mistress'  white  neck.  In  the 
first  half  of  the  last  [eighteenth]  century,  I  say, 
this  is  going  on  all  Europe  over." 

It  might  seem  that  a  political  practice  such 
as  this  might  have  been  based  upon  postulates 
that  denied  the  possession  by  the  people  of 
moral  rights  to  consideration,  or  placed  the 
conduct  of  monarchs  outside  the  realm  of  or- 
dinary morality.  It  is  quite  clear,  however, 
that,  despite  the  general  acceptance  of  the  doc- 
trines of  Machiavelli,  the  argument  in  behalf  of 
royal  absolutism  and  selfishness  was  not  stated 
in  terms  as  bald  as  these.  It  is  true  that  the 
rulers,  when  they  took  thought  at  all,  regarded 
themselves  as  endowed  with  overlordship  by 
divine  providence,  or,  at  least,  by  the  work- 
ing out  of  historical  processes  beyond  direct 
human  control,  and  that,  as  thus  circumstanced, 
they  regarded  themselves  as  the  absolute  own- 
ers of  sovereignty  as  of  a  piece  of  property, 
and  that  this  ownership  carried  with  it  full 
rights  of  use  and  disposition  of  their  subjects 

103 


PROBLEMS  OF  READJUSTMENT 

and  of  all  that  they  might  possess.  This  com- 
prehensive right  the  rulers  claimed  as  inhering 
and  original  in  themselves,  and  not  as  obtained 
by  any  sort  of  gift  or  grant,  real  or  construc- 
tive, from  those  whom  they  ruled.  At  the  same 
time,  however,  it  would  be  a  mistake,  I  think, 
to  hold  that  the  rulers  in  their  dealings  with 
their  subjects  felt  themselves  free  from  all  the 
/  moral  restraints  which  humanity  and  sympathy 

lU*  ^  impose.    But  it  is  clear  that  the  moral  obliga- 

tions which  they  recognized  were  those  of  gen- 
erosity and  charity  rather  than  those  of  jus- 

h&  ^  t<£ice  which  imply  the  possession  of  rights  by 

those  to  be  benefited  by  them. 

As  rationalizing  or  at  least  as  explaining  the 
acceptance  of  this  theory  which  regarded  the 
right  of  rulership  as  a  piece  of  property,  and 
as  giving  to  the  monarch  what  amounted  to  an 
ownership  of  his  subjects,  including  their  goods, 
it  is  to  be  remembered  that  it  was  not  until  the 
early  part  of  the  nineteenth  century  that  the 
principle  and  practice  disappeared  from  Europe 
of  regarding  human  beings  as  objects  that  might 
be  treated  as  chattels  or  appurtenances  of  the 
soil.  And  indeed  the  entire  feudal  system  out 
of  which  the  monarchical  state  developed  was 
based  upon  the  idea  that  political  jurisdiction 

104 


THE  INDIVIDUAL  AND  THE  STATE 

arises  out  of  ownership — ownership  of  the  land. 
It  would  seem  then  that  the  rights  claimed 
and  exercised  by  the  eighteenth-century  mon- 
archs  were  not  different  in  essential  nature 
from  those  claimed  at  the  present  time  by  hold- 
ers of  private  property  who  regard  the  institu- 
tion of  private  property  as  devoid  of  social  or 

—  * —  if;,  I       /i  /  j^         I 

political  connotations,  and,  therefore,   regard  \^'^^ 
themselves  as  vested  with  rights  of  use  and  dis- A^  ifiM* 
position,  the  free  exercise  of  which  may  not  beV*^7*^       * 
interfered  with  except  under  very  special  cir-    y*s~ 
cumstances.     Thus,  as  we  know,  there  are  at   / 
the  present  time  many  owners  of  large  fortunes 
the  possession  of  which  has  come  to  them  by 
accident  of  descent,  by  the  favoring  operation 
of  law,  or  by  the  happy  working  of  economic 
forces,  who  feel  themselves  free  to  use  their 
wealth,  if  they  see  fit,  for  their  selfish  welfare, 
and,  as  employers  of  labor,  consider  that  those 
who  work  for  them  have  no  moral  claim,  and 
certainly  no  legal  claim,   beyond   such  as  is 
founded  upon  their  contracts  of  employment, 
that  anything  beyond  this  which  they  may  do 
for  the  benefit  of  those  subject  to  their  eco- 
nomic rule  is  an  act  of  charity  or  generosity 
rather  than  an  obligation  of  distributive  jus- 
tice. 

105 


PROBLEMS  OF  READJUSTMENT 

This  proprietary  conception  of  political 
rulership  has  now  happily  disappeared  from 
the  thought  of  modern  civilized  peoples.  No 
longer  do  the  rulers  of  these  nations  regard 
their  lands  and  their  subjects  as  objects  of  own- 
ership which  may  be  used  for  the  advancement 
of  purely  dynastic  interests  or  the  satisfaction 
of  purely  selfish  pleasures.  Instead  they  feel 
that  their  powers  are  to  be  exercised  for  the 
benefit  of  the  state  over  which  they  rule. 
Whether  or  not  the  welfare  of  this  political  en- 
tity termed  the  state  is  regarded  as  necessarily 
including  the  welfare  of  its  citizens,  is  a  ques- 
tion presently  to  be  considered. 

In  a  second  respect,  also,  the  eighteenth-cen- 
tury conception  of  monarchy  has  been  pro- 
foundly modified.  No  longer  is  it  held  that  the 
exercise  of  political  authority  should  be  to  any 
considerable  extent  subject  to  the  discretionary 
will  of  those  who  possess  it.  Upon  the  con- 
trary, in  all  its  manifestations  it  is  felt  that 
political  power  should  be  exercised  only  in  ac- 
cordance with  forms  and  within  the  limits  which 
existing  laws  establish.  This  is  the  essential 
meaning  of  constitutionalism,  and  under  its 
regime  in  the  modern  state  the  individual  is 
protected  against  oppression  on  the  part  of  his 

106 


THE  INDIVIDUAL  AND  THE  STATE 

rulers  as  regards  at  least  his  ordinary  rights  of 
person  and  property.  Whether  or  not  he  is  pro- 
tected, and  whether  or  not  it  is  feasible  under 
any  workable  form  of  government  so  to  narrow 
the  discretionary  powers  of  those  in  authority 
as  to  protect  him  against  the  adoption  by  his 
rulers  of  broad  public  policies,  especially  in 
matters  of  war  and  peace,  which  will  be  detri- 
mental to  his  wishes  and  welfare,  is  a  problem 
of  administrative  politics  which  cannot  be  con- 
sidered in  the  space  assigned  to  this  chapter. 
It  may  be  pointed  out,  however,  that  thus  far, 
not  even  in  the  most  democratically  and  consti- 
tutionally organized  states,  has  it  been  found 
feasible  to  subject  the  conduct  of  foreign  affairs 
to  a  popular  control  beyond  that  of  censuring 
a  policy  to  which  the  state  has  already  been 
committed  by  those  in  authority.  And  even  this 
right  of  censureship  in  practice  proves  of  very 
slight  value  in  cases  where  war  has  been  pre- 
cipitated or  rendered  imminent,  and  thus  the 
prestige  or  honor  of  the  nation  apparently  in- 
volved. 

It  has  been  said  that  the  essence  of  constitu- 
tionalism consists  in  the  fact  that  public  author- 
ity has  its  extent  and  modes  of  operation  con- 
trolled by  law.  When  we  ask  ourselves  whence 

107 


PROBLEMS  OF  READJUSTMENT 

came  these  legal  limitations  upon  the  exercise 
of  sovereignty,  who  control  their  interpreta- 
tion, and,  in  the  last  resort,  determine  their 
continuation,  we  reach  the  first  point  at  which 
an  important  difference  distinguishes  the  con- 
stitutional jurisprudence  of  England,  France 
and  the  United  States,  from  that  of  Germany 
and  Austria,  and  especially  from  that  of  the 
Kingdom  of  Prussia. 

The  political  philosophy  of  England  since 
1688  at  least,  of  France  since  1789,  and  of  the 
United  States  since  its  foundation,  is  squarely 
committed  to  the  proposition  that  all  political 
authority  comes  from  the  people,  and  is  not 
vested  in  the  rulers  as  an  original  and  inher- 
ent right.1  This  is  not  the  assertion  of  that 

1  The  constitution  of  France,  if  its  fundamental  laws  can 
be  regarded  as  constituting  a  complete  instrument  of  gov- 
ernment, does  not  contain  an  explicit  statement  of  popular 
sovereignty,  but  the  principle  certainly  finds  acceptance  in 
her  constitutional  jurisprudence.  Perhaps  the  clearest 
statement  of  the  doctrine  in  formal  terms  is  to  be  found 
in  the  constitution  of  Belgium,  adopted  in  1831,  in  which  the 
following  declarations  occur:  "Art.  25.  All  powers  ema- 
nate from  the  people.  They  shall  be  exercised  in  the  man- 
ner established  by  the  Constitution.  .  .  .  Art.  29.  The  ex' 
ecutive  power  is  vested  in  the  King,  subject  to  the  regula- 
tions of  the  Constitution.  .  .  .  Art.  129.  No  law,  ordinance, 
or  regulation  of  the  general,  provincial,  or  communal  gov- 

108 


THE  INDIVIDUAL  AND  THE  STATE 

merely  moral  doctrine  that  the  people  have  a 
revolutionary  right  to  resist  political  oppres- 
sion, and  that  thus,  in  a  sense,  all  just  govern- 
ments may  be  said  to  derive  their  right  to  be 
from  the  consent  of  the  governed.  This,  indeed, 
is  asserted,  but  the  doctrine  is  much  more  than 
this.  It  includes  the  constitutional  principle 
that,  as  a  legal  proposition,  the  rulers  possess 
only  delegated  authority,  and  the  legal  limita- 
tions which  circumscribe  their  official  acts  are 
not  self-set,  but  are  imposed  by  laws  which 
draw  their  force  from  the  popular  will  as 
authoritatively  expressed  at  the  polls,  in  con- 
ventions, or  in  representative  legislative 
bodies. 

As  opposed  to  this  fundamental  constitutional 
doctrine,  the  monarchical  theory  of  continental 
Europe  is  that  the  right  of  political  rulership 
comes  from  above.  It  inheres  in,  and  is  an 
original  right  of,  the  monarch,  and,  as  such,  in 
its  exercise  is  ultimately  subject  only  to  the 
will  of  him  who  possesses  it.  It  is  true  that 
Austria-Hungary,  and  the  German  Empire  and 

eminent  shall  be  obligatory  until  after  having  been  pub- 
lished in  the  manner  prescribed  by  law.  Art.  130.  The 
Constitution  shall  not  be  suspended,  either  in  whole  or  in 
part." 

109 


PROBLEMS  OF  READJUSTMENT 

its  individual  states,  including  Prussia,  oper- 
ate under  formal  written  constitutions,  but 
these  instruments  of  government  are  regarded 
as  themselves  the  creations  of  the  royal  or  im- 
perial will.1  It  thus  results  that  not  only  may 
the  constitutions  be  changed  by  an  exercise  of 
the  royal  or  imperial  will,  but  that  the  sover- 
eign is  regarded  not  as  the  exerciser  of  enu- 
merated delegated  powers,  but  as  the  possessor 
of  sovereign  authority  free  from  legal  restraint 
in  all  matters  in  regard  to  which  he  has  not 
seen  fit  to  fix  self-set  limitations.  This  is  the 
constitutional  theory,  whatever  may  have  been 
the  popular  pressure  which,  historically  speak- 
ing, may  have  led  to  the  promulgation  of  the 
written  constitutions. 

It  further  follows  from  this  constitutional 
conception  that  the  part  played  by  the  elected 
representatives  of  the  people  in  the  enactment 
of  laws  and  in  the  adoption  of  public  policies  is 

1It  is  not  necessary  in  this  discussion  to  consider  the 
question  whether  in  'the  German  Empire  the  sovereign 
power  is  vested  in  the  Bundesrath  rather  than  in  the  Em- 
peror. The  fact  that  the  king  of  Prussia  is,  ex  officio,  the 
<jerman  emperor,  and  that  as  king  he  controls  the  Prussian 
delegates  which  in  turn  control  the  Bundesrath,  renders 
largely  academic,  for  the  purpose  of  this  paper  at  least, 
the  constitutional  status  of  the  emperor  in  the  Empire. 

110 


THE  INDIVIDUAL  AND  THE  STATE 

one  quite  different  from  that  which  is  played  in 
countries  whose  constitutional  systems  are 
founded  upon  a  democratic  basis.  According  to 
the  doctrine  held  by  German  jurists  the  people 
through  their  representatives  participate  not 
in  the  creation  of  law,  but  in  the  determination  ) 
of  the  contents  of  a  proposition  which  is  to  be  S 
submitted  to  the  sovereign  for  the  exercise  of  S 
his  supreme  legislative  will.  Essentially  speak-  j 
ing,  then,  the  situation  is  this:  The  ruler,  as 
a  matter  of  grace  and  expediency,  is  pleased  to 
learn  the  wishes  of  his  people  regarding  a  prop- 
osition of  law  or  the  adoption  of  a  public  pol- 
icy, and  to  obtain  such  information  regarding 
its  wisdom  as  a  representative  chamber  is  able 
to  provide ;  and  these  wishes  and  this  informa- 
tion he  necessarily  takes  into  consideration  in 
determining  the  exercise  of  his  own  sovereign 
will.  But  never  does  he  regard  these  factors  as 
controlling  in  any  affirmative  sense.  So  long  as 
the  constitution  which  he  has  promulgated  ex- 
ists, he  agrees  not  to  act  contrary  to  its  provi- 
sions with  regard  to  the  matters  which  are 
therein  specified.  But  never  for  a  moment  does 
the  German  ruler  admit  himself  to  be  under  a 
legal  or  even  a  moral  or  political  obligation  to 
give  effect  to  an  expression  of  the  will  of  the 

111 


PROBLEMS  OF  READJUSTMENT 

representatives  of  the  people  of  which  he  dis- 
approves. 

It  is  this  relationship  in  which  the  king  stands 
to  his  popularly  elected  legislative  chambers 
which  interprets  many  features  of  German  pub- 
lic life  which  seem  strange  to  English  and 
American  observers.  It  explains  in  the  first 
place  the  fact  that  it  is  considered  a  wholly 
justifiable  practice  for  the  king  and  his  personal 
advisers — "the  Government"  as  they  are  called 
— to  control  so  far  as  they  are  able  not  only  the 
elections  of  members  to  the  representative 
body,  but  by  rewards  and  other  forms  of  po- 
litical pressure  to  influence  the  votes  of  the  rep- 
resentatives after  their  election.  It  explains 
furthermore  the  policy  of  the  "Government" 
in  playing  off  one  party  or  faction  against  an- 
other and  thus  through  the  bloc  system  of  ob- 
taining a  majority  vote  in  favor  of  action  which 
the  Government  desires.  It  explains  also  the 
fact  that  not  even  the  first  steps  have  been  taken 
in  Germany  towards  the  development  of  respon- 
sible parliamentary  government  whether  of  the 
English  or  the  French  type.  It  is  indeed  recog- 
nized by  all  of  their  publicists  that  such  a  sys-! 
tern  is  absolutely  incompatible  with  the  Ger- 
man conception  of  monarchical  power.  It  is 

112 


THE  INDIVIDUAL  AND  THE  STATE 

true  that  irritation,  at  times  intense  in  char- 
acter, has  been  felt  and  expressed  against  the 
assumption  of  the  emperor  of  the  right  to  di- 
rect and  control  foreign  affairs  by  his  own  per- 
sonal acts  and  words.  But  this,  however,  has 
not  been  because  of  any  derogation  of  the  power 
of  the  representatives  of  the  people  or  of  a  min- 
istry which  they  support,  but  because,  under 
the  imperial  constitution,  he  is  required  to  act 
through  his  chancellor,  who  in  turn  is  supposed 
to  exercise  his  power  in  and  through  the  Bun- 
desrath,  which  body  in  turn  represents  the 
"Governments"  of  the  several  states  of  the 
Empire.  Since  the  downfall  of  Bismarck,  and 
especially  since  the  retirement  of  his  successor, 
Caprivi,  the  emperor  has  selected  as  his  chancel- 
lor and  president  of  the  Prussian  Ministerium 
men  who  have  been  willing  in  very  large  meas- 
ure to  subordinate  their  own  wills  and  judg- 
ments to  that  of  their  imperial  master,  and 
thus  the  personal  influence  of  the  emperor  has 
been  very  great,  especially  in  foreign  affairs. 
While  this  has  been  at  times  disapproved  of, 
there  has  never  been  any  movement,  seriously 
pressed,  to  subject  his  will  to  the  control  of  the 
popularly  elected  branch  of  the  imperial  parlia- 
ment. 

113 


PROBLEMS  OF  READJUSTMENT 

The  monarchical  conception  in  Germany  ex- 
plains still  further  the  right  which  is  freely  ex- 
ercised by  the  "Government"  of  dissolving  the 
elected  chamber  whenever  other  methods  of  ob- 
taining its  support  for  a  government  measure 
have  failed;  and,  it  may  be  said  that  so  pow- 
erful is  the  official  influence  that  may  be  exerted 
in  the  ensuing  election  that  in  almost  all  cases 
the  result  is  that  the  newly  chosen  chamber  is  of 
the  desired  political  complexion.  Von  Biilow 
in  his  ' '  Imperial  Germany ' '  complains  that  the 
Germans  lack  political  ability  by  which,  as  he 
explains,  they  show  a  disposition  to  form  a 
multitude  of  minor  parties  based  not  on  broad 
public  principles  but  upon  narrow,  particularis- 
tic, and  personal  interests.  It  would  seem,  how- 
ever, that  this  failure  of  two  or  more  strong 
political  parties  to  develop  has  been  due  in  no 
small  measure  to  the  attitude  which  the  * '  Gov- 
ernment" assumes  toward  all  political  parties. 
The  one  strong  political  party — the  Social 
Democrats — which  has  been  formed  in  German 
imperial  politics,  is  strong  in  numbers  rather 
than  in  influence,  and,  moreover,  occupies  a 
very  peculiar  position,  for,  as  von  Biilow 
frankly  says,  it  has,  from  the  standpoint  of  the 
1 '  Government, "  no  right  to  exist.  He  flatly 

114 


THE  INDIVIDUAL  AND  THE  STATE 

stigmatizes  its  members  as  enemies  of  the  Ger- 
man State — enemies  for  the  overthrow  of  whom 
any  means,  including  force  when  possible,  may 
rightfully  be  employed.  As  to  the  reasons  why 
the  Social  Democrats  are  held  in  such  peculiar 
detestation  by  the  "  Government "  I  shall  not 
have  space  to  speak,  but  shortly  stated  it  may 
be  said  that  it  is  not  so  much  their  legislative 
program  which  is  disapproved  of  as  it  is  that 
their  fundamental  political  doctrines  are  in  con- 
flict with  the  monarchical  conception  of  the  Em- 
pire and  of  Prussia.  This  is  made  abundantly 
clear  by  reading  between  the  lines  of  von  Bil- 
low's book. 

Finally,  it  may  be  said  that  the  monarchical 
conception  in  Germany  explains  the  open  and 
avowed  measures  which  are  taken  by  the  rul- 
ing authorities  to  control  the  formation  and 
expression  of  a  popular  opinion  with  regard 
to  matters  of  public  policy.  Not  only  is  there 
kept  a  strict  control  over  unofficial  expressions 
in  the  press,  as  the  numerous  prosecutions  for 
lese  majeste  testify,  but,  and  more  espe- 
cially, governmentally  inspired  articles  are 
constantly  published  in  the  leading  news- 
papers in  order  that  the  people  shall  be 
led  to  take  a  favorable  view  regarding  public 

115 


PROBLEMS  OF  READJUSTMENT 

policies   which    are   approved   by   the   "Gov- 
ernment. ' ' 

It  had  not  been  my  intention  to  encumber  this 
essay  with  quotations,  but  the  point  with  which 
I  am  now  concerned  is  of  an  importance  that 
warrants  me,  in  order  to  make  it  clear,  in  giv- 
ing the  words  of  Dr.  Hasbach,  the  author  of  an 
important  work  entitled  "Die  Moderne  Demo- 
cratic," published  in  1912.  In  an  article  pub- 
lished during  the  present  year1  in  which  he 
states  more  specifically  the  function  which  pub- 
lic opinion  plays  in  the  modern  constitutional 
state,  Dr.  Hasbach  says:  "Who  forms  pub- 
lic opinion?  In  democracy  and  parliamentary 
monarchy  [England]  it  is  created  exclusively 
by  parties;  in  constitutional  monarchy  [e.  g., 
Germany] ,  on  the  other  hand,  by  parties  and  the 
Government.  For  a  full  understanding  of  this 
important  difference  we  first  must  clearly  dis- 
tinguish between  parliamentary  and  constitu- 
tional monarchy.  In  parliamentary  monarchy 
the  influence  of  the  monarch  is  as  a  matter  of 
fact  so  far  suppressed  that  here,  too,  the 
stronger  party  opinion  determines  the  destiny 
of  the  country,  while  in  the  constitutional  mon- 

1  The  American  Political  Science  Review,  Feb.,  1915. 
"The  Essence  of  Democracy." 

116 


THE  INDIVIDUAL  AND  THE  STATE 

archy  the  prince  as  joint  possessor  of  the  legis- 
lative power,  and  as  the  possessor  of  the  ex- 
ecutive, exercises  a  considerable  influence  upon 
the  formation  of  public  opinion.  The  ministers 
nominated  by  him  introduce  bills  into  parlia- 
ment; they  defend  them  against  the  criticism 
of  representatives  whom  they  are  compelled  to 
face;  the  prince  addresses  messages  to  parlia- 
ment ;  he  can  dissolve  it  and  thereby  take  a  po- 
sition on  definite  questions ;  official  newspapers 
defend  the  attitude  of  the  government;  party 
organs  which  approve  the  policy  of  the  govern- 
ment support  it  or  open  their  columns  to  it ;  the 
government  seeks  to  influence  representatives, 
etc." 

"These  are  methods,"  Dr.  Hasbach  contin- 
ues, "some  of  which  are  also  understood  in 
America;  in  America  the  President  addresses 
messages  to  Congress;  presidents  and  govern- 
ors attempt  to  influence  the  legislative  power; 
there  are  also  newspapers  which  support  the 
President  and  governors  against  the  legislative 
assemblies  if  they  consider  the  former's  poli- 
cies advantageous."  This  is  true,  but  the  im- 
portant fact  is  that  in  America  the  president 
and  the  governors  of  the  States  are  themselves 
the  leaders  of  their  parties  and  are  representa- 

117 


tives  of  the  people.  The  stronger  public  opin- 
ion which  thus  finds  expression  in  State  action 
is  therefore  a  popular  opinion  and  is  not  one 
which  is  largely  determined  by  the  judgment  of 
persons  who  are  not  responsible  to  the  people 
and  who  only  in  a  purely  fictitious  sense  can  be 
said  to  represent  them. 

The  refusal  upon  the  part  of  the  "  Govern- 
ment "  in  Germany  to  permit  the  popular  will 
as  represented  in  the  legislature  to  exert  a  con- 
trolling influence  in  the  determination  of  public 
policies  is  of  course  not  predicated  solely  or 
even  in  major  part  upon  the  purely  technical 
and  legal  premise  that  sovereignty  finds  its  fons 
et  origo  in  the  monarch.  Nor,  as  we  have  al- 
ready seen,  is  it  justified  by  any  claim  that  po- 
litical rulership  need  not  necessarily  be  for  the 
benefit  of  the  state  or  its  people.  Eather,  it 
would  seem  to  be  founded  upon  a  conviction 
that  the  problem  of  government  is,  by  its  very 
nature,  one,  the  satisfactory  solution  of  which 
cannot  be  secured  by  surrendering  a  controlling 
influence  to  the  people.  And,  in  turn,  the  rea- 
son why  the  government  of  the  state  is  held 
to  be  of  this  essentially  unpopular  or  undemo- 
cratic character  would  seem  to  be  compounded 
of  two  convictions. 

118 


THE  INDIVIDUAL  AND  THE  STATE 

The  first  of  these  beliefs  is  that,  as  a  practical 
administrative  proposition,  the  problem  of  gov- 
ernment is  one  which  requires  the  exercise  of 
faculties  of  judgment  and  of  executive  over- 
sight and  control  which  it  is  not  possible  for  an 
electorate,  however  enlightened  and  well  dis- 
posed, to  possess  and  exercise.  The  second  be- 
lief, which  would  seem  to  have  at  least  a  certain 
amount  of  currency  even  if  it  cannot  be  said 
to  be  generally  held,  is  that  the  ultimate  end 
for  the  realization  of  which  the  state  exists  is 
something  else  and  higher  than  the  welfare  of 
the  citizens  as  individuals,  whether  distribu- 
tively  or  collectively  considered. 

Upon  the  face  of  it,  the  proposition  that  the 
efficient  carrying  on  of  the  national  govern- 
ment of  a  state  of  any  considerable  size  is  an 
administrative  task,  in  the  performance  of 
which  it  is  not  practicable  to  admit  any  con- 
siderable amount  of  democratic  participation 
or  control,  is  not  an  unreasonable  one,  and  can 
be  met  only  upon  a  basis  of  fact.  Certain  it  is 
that,  in  its  actual  operation,  German  govern- 
mental forms  and  administrative  methods  have 
produced  results  which,  from  the  standpoint  of 
present  administrative  efficiency,  are  superior 
to  those  which  any  other  government  of  the 

119 


PROBLEMS  OF  READJUSTMENT 

world  has  been  able  to  produce.  Not  only  has 
the  social  and  industrial  prosperity  of  the  peo- 
ple been  wonderfully  advanced,  and  the  gen- 
eral level  of  education  raised  to  a  high  degree, 
but  a  state  has  been  created  which  is  of  tre- 
mendous military  strength.  This  much  must 
be  admitted.  The  only  way,  therefore,  in  which 
this  exhibition  of  the  efficiency  of  an  undemo- 
cratically  organized  government  can  be  weak- 
ened is  by  what  lawyers  call  ''confession  and 
avoidance,"  namely,  by  admitting  the  claims 
that  are  made  and  avoiding  the  conclusion  at- 
tempted to  be  drawn  from  them  that  this  type 
of  political  control  is  thus  shown  to  be,  if  not 
the  best  possible,  at  least  superior  to  the  more 
democratic  forms  which  are  exhibited  in  other 
countries. 

The  avoidance  of  this  conclusion  is  based 
upon  the  assertion  that  the  state  power,  the  in- 
dustrial development,  the  social  welfare,  and 
the  high  level  of  education,  especially  upon  its 
scientific  side,  which  Germany  has  secured,  lack 
certain  elements  of  national  greatness  which 
are  more  important  than  those  which  have  been 
obtained,  and  that,  beneath  its  surface  pros- 
perity, German  national  life  contains  potenti- 
alities of  evil  which  need  only  time  and  oppor- 

120 


THE  INDIVIDUAL  AND  THE  STATE 

tunity  to  be  manifested.  Thus  the  critics  of 
deutsche  Kultur  have  claimed  that  the  successes 
which  have  been  the  product  of  the  German  con- 
stitutional and  administrative  system  have  been 
of  a  materialistic  character  and  have  lacked 
true  ethical  and  spiritual  elements — that  right 
has  been  sacrificed  to  might,  political  liberty  to 
state  authority,  and  individual  spontaneity  and 
freedom  to  organized  efficiency ;  with  a  result,  as 
is  claimed,  that  state  action  has  thrown  off  the 
limitations  which  ordinary  morality  imposes, 
and  the  entire  mind  of  the  people  has  been  cor- 
rupted; and  that  with  their  pride  swollen  with 
a  contemplation  of  the  material  success  which 
they  have  gained,  they  have  lost  respect  for,  and 
appreciation  of,  the  value  of  civilization  and  po- 
litical ideals  which  differ  from  their  own.  Mis- 
led by  this  distorted  perspective,  it  is  charged 
that  the  Germans  have  adopted  a  Weltpolitik 
which  has  brought  them  into  necessary  conflict 
with  other  nations  and  made  inevitable  the  ter- 
rible conflict  which  is  now  devastating  almost 
all  Europe. 

A  consideration  of  the  issues  which  are  thus 
drawn  between  the  Kultur  of  Germany  and  that 
of  other  nations  cannot,  of  course,  be  here  un- 
dertaken. An  adequate  treatment  of  them 

121 


PROBLEMS  OF  READJUSTMENT 

would  involve  what  would  practically  be  a  crit- 
ical examination  of  the  civilization  of  today. 
The  statement  does,  however,  seem  to  be  justi- 
fied that  the  national  ideals  of  which  I  have 
spoken  have,  so  far  as  they  have  been  held, 
tended  to  provoke  armed  conflict  with  the  other 
great  powers.  It  is  quite  explainable  and,  in 
very  large  measure,  reasonable  that  any  great 
people  should  feel  a  conviction  as  to  the  superi- 
ority of  their  own  civilization  over  that  of  other 
peoples;  but  this  does  not  necessarily  carry 
with  it  a  belief  that  it  is  desirable,  or  ethical, 
or  even  possible,  forcibly  to  impose  one's  own 
cultural  ideals  upon  other  nations  which  are  re- 
luctant to  receive  them.  If,  however,  we  may 
accept  as  representative  the  utterances  of  cer- 
tain of  their  leading  men,  the  Germans  have  felt 
a  conviction  not  only  that  their  own  Kultur  is 
inherently  superior  to  that  of  any  other  race, 
but  that  its  super-excellence  is  so  great  that 
its  benefits  must  ultimately  be  recognized  even 
by  those  upon  whom  it  has  been  imposed  by 
force  operating  in  its  materially  most  devastat- 
ing form.  Finally,  one  other  characteristic  of 
this  German  conception  of  Kultur  needs  to  be 
mentioned,  for  it  has  a  direct  bearing  upon  the 
relation  of  the  individual  to  the  state.  This 

122 


THE  INDIVIDUAL  AND  THE  STATE 

characteristic  is  that  Kultur  finds  its  apotheo- 
sis in  the  state — in  the  nation  as  politically  or- 
ganized. In  other  words,  this  Kultur  is  con- 
ceived of  as  something  more  than  a  civilization 
which  is  the  summation  of  the  culture  of  indi- 
viduals. It  is  the  nationally  organized  genius 
of  the  people — a  genius  which  finds  its  highest 
end  and  ultimate  manifestation  in  the  power 
and  purposes  of  the  state.  And  thus  we  are 
brought  to  the  second  conviction  which  has  been 
earlier  spoken  of,  namely,  that  the  ultimate 
end  for  the  realization  of  which  the  state  exists 
is  something  else  and  higher  than  the  welfare 
of  the  citizens  as  individuals,  whether  distribu- 
tively  or  collectively  considered. 

This  theory  to  which  we  now  turn  is  one  the 
statement  of  which  in  formal  terms  is  not  an 
easy  task,  for  like  all  mystical  conceptions  it 
eludes  exact  definition.  Furthermore,  it  would 
seem  to  be  rather  an  element  which  pervades 
and  influences  German  political  philosophy  than 
an  explicit  premise  upon  which  an  argument  is 
based.  It  is,  furthermore,  an  element  which  un- 
doubtedly exercises  an  influence  in  the  feelings 
of  patriotism  of  all  peoples,  but  would  seem 
to  be  especially  powerful  in  German  national 
thought. 

123 


PROBLEMS  OF  READJUSTMENT 

The  German  nation  is  conceived  of  as  an  eth- 
nic unity  distinguished  from  other  ethnic  units 
by  a  characteristic  genius  which  finds  its  expres- 
sion in  die  deutsche  Kultur.  This  Kultur,  how- 
ever, as  we  have  already  pointed  out,  finds  its 
best  expression  in  and  through  the  state.  If 
then,  it  is  argued,  this  Kultur,  the  super-excel- 
lence of  which  is  assumed,  is  to  find  its  fullest 
realization,  two  things  are  necessary.  First, 
as  far  as  possible,  all  persons  who  have  in  their 
veins  a  sufficient  amount  of  German  blood  to  en- 
title them  to  be  regarded  as  inheritors  of  the 
German  genius  should  be  brought  within  the 
control  of  the  state  through  which  the  spir- 
itual inheritance  which  they  potentially  pos- 
sess may  find  objective  realization.  Secondly, 
the  German  nation  thus  politically  united  must, 
through  the  strength  of  its  state  organization, 
exercise  throughout  the  world  that  influence 
which  is  its  just  due.  "Der  Deutsche  Gedanke 
in  der  Welt"  is  the  title  which  Rohrbach  gives 
to  his  well-known  book  in  which  he  argues 
for  the  widest  possible  extension  of  German 
influence.  Weltmach  oder  Niederganz  is 
the  alternative  which  Bernhardi  places  be- 
fore the  eyes  of  his  countrymen,  by  the  first 
of  which  terms,  as  he  has  later  explained, 

124 


THE  INDIVIDUAL  AND  THE  STATE 

he  means  not  world  dominion  but  world  influ- 
ence. 

It  will  thus  be  seen  that  a  mystical  or  geist- 
liche  significance  is  given  to  the  conception  of 
both  the  nation  and  the  state.  The  state  is  the 
German  nation  viewed  in  a  certain  aspect — as- 
organized  for  the  realization  of  the  function 
which  Providence  has  assigned  to  it  in  the 
working  out  of  the  development  of  humanity 
and  of  world  civilization.  It  has  an  end  of  its 
own  which  cannot  be  stated  in  the  terms  of  the 
welfare  of  the  individuals  who  at  any  time  hap- 
pen to  be  under  its  control.  Its  immediate  aim 
is  its  own  power,  for  without  this  power  it  can- 
not realize  its  ultimate  ends,  and  these  ultimate 
ends,  it  is  evident,  are  so  transcendent  and  su- 
per-personal in  character  that  the  morality  of 
the  means  that  may  be  employed  for  their  at- 
tainment cannot  be  subjected  to  the  criteria 
which  govern  the  ordinary  conduct  of  individu- 
als. Furthermore,  it  is  clear  that  when  thus- 
stated  the  end  of  the  state  is  one  that  requires 
that  all  individual  and  community  interests 
should  be  subordinated  to  it. 

It  is  not  the  purpose  of  this  paper  to  consider 
the  validity  of  the  assumptions  made  in  the 
theories  which  have  been  outlined.  Its  aim  has- 

125 


PROBLEMS  OF  READJUSTMENT 

T)een  simply  one  of  orientation.  If  space 
had  allowed,  however,  the  author  would  have 
liked  to  exhibit  the  strong  infusion  of  Hegelian- 
ism  which,  in  his  opinion,  it  contains,  and,  fur- 
ther, to  show  how  the  political  transcendental- 
ism of  Hegel  seemed  to  find  objective  demon- 
stration in  the  history  of  Germany  in  the  nine- 
teenth century.  If  die  Weltgeschichte  ist  das 
Weltgericht,  it  can  be  appreciated  how  the  Ger- 
mans were  led  to  think  that  the  Prussian  Real- 
golitik  had  justified  itself. 

It  cannot  be  denied  that  the  German  doctrine 
i^hich  has  been  outlined  is  one  which  possesses 
elements  of  lofty  idealism.  It  rests,  however, 
upon  assumptions  which  cannot  be  proved,  and 
leads  to  results  which  must  be  deplored.  The 
patriotism  which  it  exacts  is  a  false  one.  It  de- 
mands sacrifices  for  which  no  real  return  is 
made ;  it  is  predicated  upon  premises  which,  if 
adopted  by  all  nations,  each  asserting  their  own 
excellence,  would  render  impossible  the  peace- 
ful adjustment  of  conflicting  interests  and  the 
.advancement  of  civilization  through  the  peace- 
ful cooperation  of  the  nations  of  the  world. 

We  turn  now  to  the  third  phase  of  the  rela- 
tion of  the  individual  to  the  state — a  phase 
~which  will  undoubtedly  be  greatly  influenced  by 

126 


THE  INDIVIDUAL  AND  THE  STATE 

the  present  war,  whatever  its  outcome.  I  speak 
now  of  the  extent  of  governmental  control.  The 
exigencies  of  war  have  forced  all  the  nations  en- 
gaged in  it  to  extend  in  many  directions,  social 
as  well  as  industrial,  the  spheres  of  their  gov- 
ernmental regulation.  Where,  upon  the  whole,, 
good  results  are  obtained  from  this  increase  in 
state  action,  it  may  be  expected  that  the  regime 
will,  in  many  instances  at  least,  be  continued 
after  peace  is  established.  But,  more  impor- 
tant than  this,  Germany,  whether  she  is  deci- 
sively defeated  or  not,  will  certainly  have  given 
to  the  world  an  impressive  exhibition  of  the  re- 
sults that  are  to  be  obtained  from  an  adminis- 
trative system  efficiently  organized  and  oper- 
ated. There  can  be  no  question  but  that  at  the 
present  time,  in  England  as  well  as  the  United 
States,  the  laissez  faire  doctrine,  as  an  a  priori 
principle,  has  lost  its  force,  and  that  that  which 
especially  operates  as  a  deterrence  to  an  exten- 
sion of  the  activities  of  the  state,  whether  by 
way  of  regulation  or  direct  operation,  is  the 
fear  that  honest  and  efficient  public  administra- 
tion cannot  be  secured.  If  then,  as  is  very 
likely  to  be  the  case,  the  nations  of  the  world 
should  take  to  heart  the  lesson  which  Germany, 
and  especially  Prussia,  has  so  impressively 

127 


PROBLEMS  OF  READJUSTMENT 

taught  them,  and  be  led  to  improve  their  admin- 
istrative systems,  we  may  be  sure  that  this  will 
be  followed  by  an  increase  in  the  control  in- 
trusted to  those  systems.  How  far  this  exten- 
sion of  the  activities  of  government  will  be  car- 
ried only  the  future  can  reveal. 


GEORGE  GRAFTON  WILSON 

International  law  is  not  dead.  Those  who 
have  made  such  affirmations  have  drawn  their 
conclusions  too  hastily.  Far  from  being  dead, 
the  subject  is  receiving  a  recognition  which  is 
a  striking  tribute  to  its  vitality.  Apparently 
not  one  of  the  warring  nations  regards  inter- 
national law  as  even  in  a  weakened  condition. 

The  attempts  of  the  states  at  war  to  put  them- 
selves right  in  the  eyes  of  the  world  and  to  cite 
precedents  in  international  law  in  support  of 
their  acts  is  a  comparatively  new  phenomenon 
in  the  history  of  conflict  among  states.  The 
old  idea  that  the  state  could  do  no  wrong  seems 
now  to  be  open  to  question,  and  it  is  even  af- 
firmed that  kings  can  do  wrong  and  that  no 
ruler  can  now  affirm,  "I  am  the  state."  The 
right  of  a  state  to  work  its  will  regardless  of 

129 


PROBLEMS  OF  READJUSTMENT 

other  states  is  not  admitted,  even  though  the 
aggressor  may  be  older,  more  powerful,  or  more 
progressive.  Some  are  questioning  the  old 
maxim  that  "a  higher  civilization  may  right- 
fully supplant  a  lower."  Indeed,  there  does 
not  at  present  seem  to  be  any  satisfactory  cri- 
terion for  measuring  what  is  called  civilization 
unless  it  be,  as  some  claim,  the  military  power. 
A  careful  analysis  seems  to  cast  more  than  a 
doubt  upon  this  basis  of  standardization.  In 
the  exercise  of  sovereignty  it  must  be  recog- 
nized that  there  are  principles  governing  the 
conduct  of  states  and  that  these  principles  can- 
not be  lightly  disregarded. . 

The  flood  of  printed  material  that  has  poured 
from  the  governmental  and  other  presses  in  an 
attempt  to  justify  the  action  of  the  several 
states  now  engaged  in  testing  by  arms  some  of 
their  ideas  of  civilization  is  enormous.  There 
is  no  escaping  from  these  arguments.  They 
are  inclosed  in  letters  from  old  friends  on  either 
side.  They  are  furnished  by  unsubsidized  and 
subsidized  representatives  and  patriots  who 
plead  the  causes  of  their  respective  states. 
Why  should  this  be  if  there  exist  no  standards 
or  principles  by  which  these  actions  should  be 
judged?  The  question  is  answered  in  these 

130 


THE  WAR  AND  INTERNATIONAL  LAW 

documents  themselves  by  the  frank  acknowledg- 
ment that  the  aim  of  the  publication  is  to  show 
wherein  the  state  publishing  the  document  has 
observed  the  law  of  nations  and  wherein  its  op- 
ponent has  set  it  aside.  White  books,  gray 
books,  orange  books,  yellow  books,  and  others 
in  the  chromatic  range  have  appeared.  Patri- 
otic citizens  of  almost  every  walk  of  life  and 
grade  of  ability  have  added  to  the  bulk  of  ma- 
terial until  the  mass  is  appalling  to  one  who 
seeks  the  real  facts. 

The  general  testimony  of  each  that  its  own 
government  "sought  only  peace,"  causes  one  to 
wonder  by  what  mysterious  power  the  aims  of 
those  in  authority  were  so  manifestly  perverted. 
In  general,  international  law  favors  the  main- 
tenance of  peace  and  apparently  each  state 
just  now  desires  to  have  on  its  side  the  utmost 
possible  support  for  its  method  in  the  attempt 
to  maintain  the  peace  of  the  world.  Some  of  the 
states  which  seem  not  to  have  found  good 
grounds  for  going  to  war  before  actually  en- 
gaging in  hostilities  have  endeavored  to  dis- 
cover them  afterward.  Whether  these  will 
stand  the  test  later,  remains  to  be  seen.  The 
important  fact  is,  however,  that  there  is  a  clear 
attempt  to  bring  the  action  within  the  range 

131 


PROBLEMS  OF  READJUSTMENT 

of  those  which  international  law  justifies  and 
supports. 

It  is  worthy  of  notice  also  that  the  endeavor 
to  conform  to  international  law  as  set  forth  by 
international  conferences  and  congresses  has 
been  universal.  The  third  convention  of  the 
Hague  Conference  of  1907  provides  that  "the 
contracting  parties  recognize  that  hostilities  be- 
tween them  must  not  commence  without  a  pre- 
vious and  unequivocal  warning,  which  shall  take 
the  form  either  of  a  reasoned  declaration  of 
war  or  of  an  ultimatum  with  a  conditional  dec- 
laration of  war. ' '  In  spite  of  the  fact  that  the 
general  practice  for  two  hundred  years  has 
been  in  an  overwhelming  majority  of  cases  con- 
trary to  this  convention,  even  under  greatest 
strain,  in  1914,  the  convention  was  followed. 
The  excuse  could  have  been  advanced  that  as 
Servia  had  not  ratified  this  convention,  other 
powers  might  be  relieved  of  some  of  its  obliga- 
tions, but  seemingly  each  wished  to  conform  to 
the  latest  pronouncement  upon  the  law  relative 
to  the  commencement  of  hostilities. 

How  remarkable  was  this  recognition  of  the 
Convention  of  1907  relative  to  the  opening  of 
hostilities  may  be  seen  if  the  practice  of  states 
during  the  last  two  centuries  be  reviewed.  Dur- 

132 


THE  WAR  AND  INTERNATIONAL  LAW 

ing  this  period  there  have  been  about  one  hun- 
dred and  forty  wars.  Of  course,  there  are  not 
included  the  periodical  revolutions  of  some  of 
the  states  of  Central  and  South  America.  In 
all  the  wars  between  1700  and  1914  only  ten 
seem  to  have  received  formal  sanction  by  dec- 
laration, though  a  few  were  informally  declared 
and  only  six  of  the  declarations  might  properly 
be  called  preliminary.  This  was  a  wide  depar- 
ture from  the  practice  of  those  ages  which  some 
have  been  pleased  to  call  "dark"  when  it  was 
held  that  an  honorable  foe  would  not  strike 
without  previous  notice.  Even  in  the  more 
ancient  days  it  was  a  custom  to  enter  upon  hos- 
tilities with  a  foreign  state  only  after  a  cere- 
monial, often  of  the  most  elaborate  nature, 
though  the  religious  part  seems  sometimes  to 
have  been  to  justify  the  war  before  the  gods 
rather  than  before  men.  The  United  States  in 
1898  by  Act  of  Congress  declared  on  April  25 
that  war  had  existed  since  April  21.  In  the 
present  great  war  where  there  is  a  network  of 
declarations  of  state  against  state,  these  have 
been  uniformly  prior  to  the  opening  of  hostili- 
ties and  frequently  detailed,  sometimes  indicat- 
ing not  merely  the  day  upon  which  war  would 
begin  but  also  the  hour  and  minute.  Thus  in 

133 


PROBLEMS  OF  READJUSTMENT 

the  opening  of  the  war  there  was  in  1914  a  re- 
spect for  conventional  forms  which  shows  in  a 
marked  degree  the  influence  of  the  work  of  the 
Hague  conferences  and  for  legal  purposes  gives 
a  definiteness  to  the  relations  consequent  upon 
the  state  of  war  which  has  existed  in  few  of  the 
wars  of  modern  times. 

As  the  third  of  the  Hague  conventions  of 
1907  has  been  observed  as  shown  in  the  declara- 
tions of  war  in  1914,  so  the  fourth  of  these 
conventions  has  been  embodied  in  the  laws  of 
nearly  all  the  belligerents.  In  cases  in  which 
this  convention  has  not  been  thus  embodied,  the 
corresponding  convention  of  1899  has  usually 
served  a  like  purpose.  These  conventions  re- 
late to  the  laws  and  customs  of  war  on  land. 
These  rules  were  detailed  and  regarded  as 
showing  the  advanced  ideas  of  the  states  of 
the  world  as  to  the  proper  conduct  of  war  if  it 
should  unfortunately  arise.  Definite  and  for- 
mal statement  of  the  rules  under  which  war 
shall  be  conducted  is  in  itself  comparatively 
modern,  the  first  great  set  of  such  rules  issuing 
from  the  War  Department  of  the  United  States 
scarcely  fifty  years  ago  and  commonly  known 
as  Lieber's  Code.  Subsequent  rules  have  been 
frankly  based  upon  Lieber's  Code.  These  rules 

134 


THE  WAR  AND  INTERNATIONAL  LAW 

of  1899  and  1907  are  tributes  to  the  fairmind- 
edness  of  the  early  codifier.  Is  it  not  in  itself  a 
marked  advance  that  the  old  motto  that  * '  all  is 
fair  in  war"  is  no  longer  even  current?  A 
careful  review  of  these  Hague  rules  and  testing 
of  action  of  the  belligerents  thereby  show  a 
closer  observance  of  these  rules  than  is  gen- 
erally believed.  Each  belligerent  party  has 
accused  its  opponent  of  violation  or  of  failure 
to  observe  these  rules.  These  accusations  have 
been  widely  published  and  have  received  cre- 
dence usually  according  to  preconceived  predi- 
lections of  the  reader.  It  is  reasonable  to  sup- 
pose that  there  have  been  acts  both  in  the  east- 
ern and  in  the  western  theaters  of  contest  which 
would  not  conform  to  the  accepted  laws  of  war. 
Certainly  the  invading  armies  of  both  parties 
have  been  accused  of  such  acts  and  of  course 
it  would  be  the  invading  army  which  would  or- 
dinarily be  the  only  one  generally  guilty  of,  or 
having  much  reason  for,  such  acts.  The  rela- 
tions between  the  respective  combatant  forces 
seem  to  have  been  generally  in  accord  with  law. 
The  investigation  of  the  treatment  of  prisoners 
by  a  representative  of  the  United  States  gov- 
ernment showed  a  condition  usually  com- 
mended. The  advance  in  this  respect  since  the 

135 


PROBLEMS  OF  READJUSTMENT 

days  of  the  American  Civil  War  is  marked. 

The  instruments  of  warfare  have  usually 
been  such  as  are  approved  by  law.  It  is  true 
that  the  guns  have  been  of  a  larger  caliber  and 
of  a  longer  range  than  those  previously  used. 
In  the  huge  siege  guns  Germany  has  found  a 
weapon  of  offense  which  made  advance  against 
strongly  fortified  positions  possible  in  the  early 
days  of  the  war.  The  use  of  such  guns  made  it 
necessary  for  the  opponents  of  Germany  to  use 
other  methods  of  defense  than  those  originally 
planned,  but  the  legality  of  the  use  of  big  guns 
on  land  and  sea  is  unquestioned.  There  was  a 
proposition  in  the  Conference  at  The  Hague 
that  limitation  of  armaments  begin  by  restrict- 
ing the  effectiveness  of  guns  to  the  standard 
of  the  most  effective  then  constructed.  There 
was,  however,  such  reluctance  on  the  part  of 
the  states  supposed  to  have  the  most  effective 
guns,  to  furnish  data  upon  the  subject,  that  the 
proposition  failed.  The  effectivity  of  the  gun  is 
not  always  a  matter  to  be  determined  by  its 
caliber,  but  is  often  dependent  upon  the  "man 
behind  the  gun." 

While  the  size  and  destructiveness  of  the  gun 
may  not  be,  up  to  this  time,  subject  to  limi- 
tation, there  are  restrictions  upon  the  use  of 

136 


THE  WAR  AND  INTERNATIONAL  LAW 

certain  projectiles  which  cause  unnecessary  suf- 
fering. Small  explosive  bullets,  copper  bullets, 
etc.,  are  prohibited  and  such  prohibition  seems 
to  have  been  respected.  Accusations  in  regard 
to  the  use  of  dum-dum  bullets  have  been  made 
by  both  belligerent  parties.  It  is  said  that  one 
of  the  belligerents  was  about  to  submit  as  evi- 
dence of  his  opponent's  guilt  certain  dum-dum 
bullets,  when  a  neutral  expert  on  projectiles 
called  attention  to  the  fact  that  these  bullets 
about  to  be  submitted  were  manufactured  only 
in  the  state  bringing  the  accusation,  and  that 
they  would  not  fit  any  of  the  opponents'  guns. 
This  accusation  was  allowed  to  drop.  There 
are  in  recent  times  many  instances  where  it  is 
claimed  that  the  uniform  of  an  enemy  is  used  to 
deceive,  but  when  the  aim  in  modern  warfare  is 
to  avoid  color  which  will  be  conspicuous,  to 
eliminate  brass  buttons  and  shining  helmets, 
and  in  many  instances  even  to  use  no  flag,  it  is 
easy  to  understand  that  cases  of  mistaken  iden- 
tity in  khaki  uniforms  may  easily  occur. 

Aerial  bombardment  has  also  been  a  matter 
on  which  considerable  difference  of  opinion  has 
been  expressed.  The  laws  of  land  upon  this 
subject  are  brief  and  state  "the  attack  or  bom- 
bardment, by  any  means  whatever,  of  towns, 

137 


PROBLEMS  OF  READJUSTMENT 

villages,  habitations  or  buildings  which  are  not 
defended  is  forbidden. ' '  The  rules  also  provide 
that  in  making  an  attack  the  commander  should 
do  all  he  can  to  warn  the  authorities.  Mani- 
festly if  the  attack  is  to  be  a  surprise  this  in- 
junction would  not  be  obligatory  and  it  was  so 
understood  by  those  negotiating  the  conven- 
tion. It  is  also  exceedingly  difficult  for  an  air- 
man to  determine  in  every  instance  whether  a 
town  is  defended  and  there  is  thus  far  no  clear 
definition  of  defense.  Only  sixteen  of  the  forty- 
four  states  represented  at  the  second  Hague 
conference  have  signed  the  convention  prohibit- 
ing the  discharge  of  projectiles  from  aircraft 
and  Austria,  France,  Germany  and  Russia  are 
not  among  these.  Indeed  aerial  warfare  is  a 
type  so  modern  that  its  possibilities  and  proper 
regulation  can  scarcely  be  predicated. 

Here  it  should  be  borne  in  mind  that  new 
means  of  warfare  have  from  earliest  times  been 
opposed  by  the  party  not  possessing  them. 
Gunpowder  was  at  one  time  the  subject  of  de- 
nunciation, cannons  were  condemned,  and  tor- 
pedoes were  regarded  as  the  creation  of  devil- 
ish ingenuity.  There  has  been  opposition  to 
the  use  of  shells  which  diffuse  gases  and  put 
the  enemy  hors  de  combat.  The  late  Admiral 

138 


THE  WAR  AND  INTERNATIONAL  LAW 

Mahan  pointed  out  that  giving  an  enemy  gas 
which  would  not  cause  unnecessary  suffering 
and  then  capturing  him  might  be  more  humane 
than  mangling  him  with  projectiles  before  mak- 
ing him  a  prisoner. 

The  laws  of  war  of  all  countries  regard  non- 
combatants  who  take  up  arms  and  commit  hos- 
tilities, except  as  levees  en  masse,  as  liable  to 
punishment  for  illegitimate  acts.  The  nature 
of  the  punishment  will  be  determined  by  the 
exigencies.  It  is  true  that  the  Hague  rules  pro- 
vide against  collective  punishment  for  the  acts 
of  an  individual,  but  the  report  of  the  commis- 
sion which  drew  up  this  article  provides  that  it 
shall  be  without  "  prejudice  to  the  question  of 
reprisals."  Reprisals  are  usually  acts  of  re- 
taliation for  illegitimate  acts  of  warfare  and 
are  therefore  usually  beyond  the  range  of  law. 
These  acts  must  be  judged  accordingly  and 
must  not  be  advanced  to  show  that  the  Hague 
conventions  have  been  violated.  These  conven- 
tions have  been  observed  far  more  strictly  than 
one  could  have  anticipated  in  1907  had  the  spec- 
tacle of  a  general  European  war  been  prophe- 
sied. The  observance  of  the  Hague  conven- 
tions has  been  in  the  main  observance  of  con- 
ventions which  have  been  formally  ratified. 

139 


PROBLEMS  OF  READJUSTMENT 

More  remarkable  in  some  respects  is  the  gen- 
eral observance  of  the  Declaration  of  London 
of  1909  which  had  not  been  ratified  by  any  of 
the  belligerents.  It  is  true  that  Great  Britain 
has  added  very  largely  to  the  list  of  articles 
contraband  of  war  under  the  Declaration  and 
in  this  France  and  Russia  have  followed.  Great 
Britain  has  also  made  extensions  in  the  range 
of  destination  which  may  be  regarded  as  hos- 
tile, thus  making  vessels  more  generally  liable 
to  capture.  Germany  and  Austria-Hungary 
have,  however,  kept  fairly  close  to  the  Declara- 
tion in  their  published  regulations  and  Japan 
has  almost  completely  embodied  its  principles. 
There  seems,  however,  at  this  time  (February 
20,  1915)  a  tendency  to  undue  extension  of 
the  list  of  contraband  to  articles  that  are  of 
such  indirect  use  in  war  that  the  list  would 
hardly  have  received  the  sanction  of  Grotius 
three  hundred  years  ago. 

Recently  negotiations  have  been  in  progress 
in  regard  to  the  establishing  of  a  war  zone 
about  Great  Britain  and  in  regard  to  the  use 
of  neutral  flags  by  British  merchant  vessels. 
Each  belligerent  seems  to  be  endeavoring  to 
the  utmost  to  extend  the  pressure  upon  his  op- 
ponent and  to  save  himself  as  far  as  possible 

140 


THE  WAR  AND  INTERNATIONAL  LAW 

without  too  great  risk  of  complications  with 
neutrals.  In  absence  of  complete  information 
as  to  whether  the  British  government  gave  or- 
ders to  use  the  American  or  other  neutral  flags 
and  in  absence  of  information  as  to  the  method 
in  which  Germany  is  to  apply  her  proclamation 
in  regard  to  the  war  zone,  it  may  be  said  that 
there  is  no  law  against  the  use  of  a  neutral  flag 
by  a  belligerent  merchant  vessel  though  the 
governmental  order  for  such  use,  if  such  were 
given,  may  be  questionable.  The  United  States 
has  generally  disapproved  of  the  use  of  false 
colors  in  the  time  of  war  and  the  prohibition 
would  have  much  support  in  the  mind  of  those 
who  believe  in  respect  for  a  national  flag. 

It  may  also  be  said  that  the  proclamation  of 
war  areas  or  war  zones  is  not  unknown  in  in- 
ternational relations.  Such  areas  were  pro- 
claimed by  Japan  for  defensive  purposes  dur- 
ing the  Eusso-Japanese  War  of  1904-5  and  the 
entrance  to  these  areas  was  regulated  or  pro- 
hibited. 

The  international  law  embodied  in  conven- 
tions, declarations,  and  other  agreements,  con- 
sidering the  area  of  the  present  hostilities,  has, 
with  comparatively  few  exceptions,  been  a  mat- 
ter of  careful  concern  on  the  part  of  the  bel- 

141 


PROBLEMS  OF  READJUSTMENT 

ligerents.  International  law  which  is  not  thus 
embodied  has  also  received  attention  and  bel- 
ligerents have  endeavored  to  justify  many  acts 
by  appeal  to  its  principles,  and  in  some  in- 
stances the  belligerents  have  frankly  admitted 
violations  of  the  law  and  their  responsi- 
bility for  such  acts.  Of  course,  many  in- 
stances must  await  the  issue  of  the  conflict  for 
determination  of  incidence  and  amount  of  lia- 
bility. 

Not  alone  the  belligerents,  but  neutrals  also 
have  shown  a  disposition  to  observe  their  in- 
ternational obligations.  In  some  cases  neutrals 
seem  to  have  leaned  over  backward  in  an  en- 
deavor to  stand  erect.  In  some  states  desirous 
of  maintaining  neutrality  the  exportation  of  ar- 
ticles, ordinarily  regular  objects  of  commerce, 
has  been  prohibited.  The  articles  embargoed 
by  neutral  European  countries  for  various  rea- 
sons number  more  than  three  hundred.  This 
list  is  varied,  from  acetic  acid  to  zinc.  It  in- 
cludes armor  plates,  arms,  etc.,  by  nature  ab- 
solute contraband,  and  dogs  in  Switzerland, 
herring  meal  and  reindeer  in  Norway,  skees  and 
sticks  in  Sweden,  etc. 

Some  neutral  states  endeavored  in  the  early 
days  of  the  war  to  prevent  the  making  of  loans 

142 


THE  WAR  AND  INTERNATIONAL  LAW 

by  private  persons  to  belligerent  governments, 
but  the  impracticability  of  such  measures  was 
well  understood  at  The  Hague  in  1907,  and  such 
obligations  were  not  imposed  on  neutral  gov- 
ernments even  in  form.  The  obligation  of 
a  neutral  government  itself  to  refrain  from 
making  loans  to  belligerents  was  clearly  and 
positively  acknowledged.  It  was  plain  that 
while  a  neutral  government  might  control  and 
be  responsible  for  its  own  acts,  it  could  not  con- 
trol or  be  responsible  for  all  the  acts  of  its  sub- 
jects. A  banker,  particularly  if  he  had  branches 
in  other  countries,  could  transfer  money  in  such 
fashion  that  its  ultimate  destination  could  not 
be  known  to  the  authorities  of  the  state  from 
which  the  transfer  was  made. 

The  United  States'  proclamation  of  neutrality 
is  extremely  comprehensive,  though  it  does  not 
as  some  have  asserted  forbid  the  expression  of 
any  except  neutral  opinions  within  the  jurisdic- 
tion of  the  United  States.  On  the  other  hand, 
it  distinctly  announces  that  it  does  not  propose 
to  interfere  "with  the  free  expression  of  opin- 
ion and  sympathy, ' '  provided  this  does  not  take 
certain  material  forms,  as  for  example,  the  aug- 
menting of  the  force  of  a  belligerent  vessel  of 
war.  The  regulations  for  securing  the  mainte- 

143 


PROBLEMS  OF  READJUSTMENT 

nance  of  the  neutrality  of  the  Panama  Canal 
are  even  more  detailed. 

There  are,  moreover,  many  new  factors  in 
this  war  which  did  not  exist  or  were  not  fully 
developed  in  earlier  wars,  such  as  mines,  sub- 
marine boats,  radiotelegraph,  aircraft,  etc. 
There  was  not  a  satisfactory  agreement  upon 
the  use  of  submarine  mines  at  the  Hague  Con- 
ference in  1907.  The  use  of  such  mines  in  the 
Russo-Japanese  War  in  1904-5  had  called  the 
attention  of  the  world  to  the  dangers  of  the  un- 
restricted laying  of  mines.  In  the  conflicting 
claims  of  belligerents  in  the  present  war  one 
fact  stands  out  clearly,  each  belligerent  desires 
that  his  action  be  regarded  as  within  the  law, 
or  else  justified  as  a  reprisal  to  meet  a  viola- 
tion of  law  by  his  opponent. 

As  to  the  use  of  submarine  boats,  there  has 
been  and  is  no  well-defined  law.  This  means  of 
warfare  is  comparatively  new  and  rules  have 
naturally  not  yet  developed  for  its  regulation. 
That  Great  Britain  had  anticipated  that  it 
might  be  used  against  merchant  vessels  is  in- 
dicated in  the  already  developed  policy  of  arm- 
ing such  vessels,  "for  defense,"  as  she  an- 
nounced. It  is  often  difficult  to  determine  the 
difference  in  fact  between  offense  and  defense. 

144 


THE  WAR  AND  INTERNATIONAL  LAW 

The  simple  fact  that  one  strikes  first  is  not 
sufficient  evidence.  The  claim  that  the  subma- 
rine boat  is  a  secret  means  of  war  is  not  a  valid 
argument  against  its  use.  This  argument  has 
been  advanced  against  other  means  of  war  but 
never  long  and  seriously  entertained.  It  is  true 
that  the  submarine  may  prey  in  a  dangerous 
manner  upon  the  private  property  of  a  bellig- 
erent, yet  at  the  Hague  Conference  of  1907 
France,  Great  Britain,  Japan  and  Eussia  were 
among  the  eleven  states  voting  against  the  im- 
munity from  capture  of  private  property  at 
sea  and  Austria  and  Germany  supported  the 
American  proposition  for  exemption.  The  vote 
stood  twenty-one  votes  for,  eleven  against  and 
one  state  not  voting. 

The  use  of  the  radiotelegraph  has  been  put 
under  very  strict  control  in  the  United  States, 
thus  formulating  as  it  were  a  set  of  rules  which 
may  later  become  generally  accepted.  Cer- 
tainly the  rules  have  been  admitted  by  the  bel- 
ligerents and  to  this  extent  have  become  inter- 
national. 

The  rules  in  regard  to  the  use  of  aircraft 
were  not  formulated  at  the  beginning  of  the 
war,  but  in  practice  there  has  been  care  to  avoid 
passing  through  the  air  above  neutral  territory. 

145 


PROBLEMS  OF  READJUSTMENT 

Neutrals  have  also  seemed  inclined  to  main- 
tain their  rights  to  jurisdiction  in  the  air  above 
their  territory.  Aircraft  have  been  placed  in 
the  category  of  contraband  and  no  objection 
has  been  raised. 

The  wide  discussion  upon  the  sinking  of 
enemy  merchant  vessels  at  sea  has  shown  a  gen- 
eral tendency  to  look  for  support  for  the  action 
in  international  precedents.  These  have  not 
been  difficult  to  find.  The  contention  that  neu- 
tral vessels  may  be  sunk  if  they  cannot  con- 
veniently be  brought  to  a  prize  court  is  one 
which  it  is  more  difficult  to  sustain,  though  there 
is  support  for  this  in  the  decisions  of  some 
courts  and  in  some  prize  regulations.  These 
are  questions  upon  which  the  International  Na- 
val Conference  in  1908-9  found  much  difference 
of  opinion.  The  law  upon  the  subject  cannot  be' 
said  to  be  settled. 

There  have  unquestionably  been  acts  upon 
the  part  of  belligerents,  if  one  can  trust  the  re- 
ports that  each  makes  in  regard  to  the  oppo- 
nent, which  were  not  merely  not  sanctioned  by 
international  law,  or  not  within  the  provisions 
of  international  law,  but  were  contrary  to  in- 
ternational law.  The  newspapers  of  one  side 
accuse  the  invading  party  of  the  other  of  atroci- 

146 


THE  WAR  AND  INTERNATIONAL  LAW 

ties.  It  is  natural  that  this  should  be  the  case 
as  the  invading  party  would  be  obliged  to  act 
in  a  more  rigorous  manner  than  the  party  on 
the  defensive  within  his  own  territory.  This 
might  lead  to,  or  be  accompanied  by,  acts  in 
excess  of,  or  contrary  to,  the  acts  permissible 
under  the  rules  of  international  law. 

Here  again,  however,  the  fact  that  the  injured 
belligerent  hastens  to  bring  these  actions  to 
public  notice  as  being  in  violation  of  interna- 
tional usage  and  meriting  general  condemnation 
is  an  evidence  of  the  force  which  the  law  has 
acquired. 

It  has  not  been  the  purpose  of  these  remarks 
to  justify  the  action  of  any  one  of  the  belliger- 
ents nor  to  hold  any  belligerent  up  for  condem- 
nation. There  seem  to  have  been  some  acts 
upon  the  part  of  each  of  the  belligerent  parties 
which  are  open  to  question  and  which  must  be 
reserved  for  a  later  judgment.  Such  conduct 
has  been  common  in  all  wars.  This  war,  in- 
volving so  many  states  and  fought  over  an  area 
so  great,  affords  more  opportunity  for  acts  not 
in  accord  with  international  law.  The  change 
in  the  means  of  warfare,  the  introduction  of 
new  instruments,  the  use  of  the  air  above  the 
earth,  and  the  sea,  and  the  water  under  the  sea- 

147 


PROBLEMS  OF  READJUSTMENT 

level,  have  given  rise  to  new  problems,  and  law 
has  not  kept  pace  with  these  changes.  States 
have  been  reluctant  to  make  agreements  in  re- 
gard to  their  probable  conduct  under  conditions 
which  have  yet  to  be  tested.  Such  facts  as  these 
should  be  kept  in  mind  when  passing  judgment 
on  the  acts  of  the  belligerents  during  the  last 
six  months.  It  should  also  be  kept  in  mind  that 
in  some  instances  the  violation  of  international 
law  has  been  frankly  admitted  and  indemnity  or 
reparation  has  been  unhesitatingly  promised. 
In  such  a  case  the  promise  of  indemnity  does 
not  make  the  act  less  a  violation  of  law,  but 
makes  the  existence  of  its  obligatory  force  un- 
questioned even  when  the  so-called  "higher 
state  policy"  has  been  followed. 

When  thinking  at  the  present  time  of  that 
treaty  which  was  ratified  and  proclaimed  almost 
exactly  one  hundred  years  ago  (February 
18,  1815)  and  of  the  hundred  years  of  peace 
with  Great  Britain  since  that  time,  it  is  well  to 
recall  that  even  though  the  present  is  a  time 
of  a  war  of  unparalleled  magnitude,  it  is  at 
the  same  time  a  period  when  the  influence  of 
the  principles  of  law  are  more  potent  than  a 
hundred  years  ago  and  indeed  more  potent  than 
ever  in  modern  times.  The  old  maxim,  inter  ar~ 

148 


THE  WAR  AND  INTERNATIONAL  LAW 

ma  silent  leges,  no  longer  applies,  and  the  doc- 
trines which  belonged  with  the  maxim  are  pass- 
ing away.  It  would  be  absurd  to  say  that  in  the 
great  struggle  of  the  nations  now  going  on 
there  has  not  been  disregard  of  international 
law,  it  would  be  equally  absurd  to  attempt  to 
give  a  complete  justification  for  all  the  acts  of 
one  side  as  against  the  other,  and  it  was  not  the 
purpose  of  these  remarks  to  endeavor  to  ac- 
complish either  of  these  ends.  It  is  the  purpose 
to  show  that  the  work  of  the  Hague  conferences 
and  the  International  Naval  Conference  was 
not  in  vain,  that  the  principles  of  international 
law  have  not  lost  all  their  power,  that  while 
new  conditions  may  have  made  old  rules  inap- 
plicable, there  has  been  an  inclination  to  ob- 
serve the  fundamental  principles,  that  while  vio- 
lations of  law  may  have  taken  place,  often  the 
liability  for  such  violations  has  been  recognized, 
and  that  international  law,  far  from  being  im- 
potent, embodies  the  principles  under  which  the 
most  powerful  nations  of  the  world  now  seek 
to  find  sanction  to  justify  their  actions  before 
the  opinion  of  the  world. 


VI 


THE  WAE  AND  INTERNATIONAL  COM- 
MERCE AND  FINANCE 

EMOBY  R.  JOHNSON,  Ph.D.,  Sc.D. 

The  economic  interests  of  all  countries  are 
so  interrelated  that  a  prolonged  war  between 
any  two  important  industrial  nations  inevitably 
creates  a  serious  disturbance  of  international 
finance  and  trade.  The  present  war,  which  in- 
volves the  larger  part  of  Europe  and  also  more 
or  less  directly  much  of  Asia,  Africa  and  Aus- 
tralia, has  temporarily  stopped  a  large  share 
of  the  world's  international  exchanges,  has  com- 
pelled such  trade  as  is  carried  on  to  be  con- 
ducted under  unprecedented  conditions,  and 
has  so  interfered  with  commerce  generally  as 
seriously  to  modify,  at  least  temporarily,  the 
commercial  and  industrial  activity  of  all  coun- 
tries, neutral  as  well  as  belligerent.  It  is  cer- 
tain that  the  permanent  industrial  and  commer- 

150 


THE  WAR,  COMMERCE  AND  FINANCE 

cial  effects  of  the  present  war  will  much  ex- 
ceed those  that  have  resulted  from  any  previous 
international  struggle,  with  the  possible  excep- 
tion of  the  Napoleonic  wars. 

This  result  is  to  be  expected,  first  of  all,  be- 
cause of  the  unprecedented  destruction  of  cap- 
ital. If  the  war  ends  in  1915,  it  is  estimated 
that  the  military  expenditures  will  reach  twenty 
billion  dollars,  and  if,  as  now  seems  possible, 
the  war  should  continue  through  1916,  the  ex- 
penditures may  reach  forty  or  fifty  billion  dol- 
lars. The  Government  expenditures,  however, 
represent  only  a  part  of  the  expenses  of  the 
war.  Capital  is  destroyed  in  great  quantities 
over  large  areas,  production  is  checked,  trade 
is  reduced  to  a  fraction  of  its  normal  propor- 
tions, and  the  total  economic  waste  due  to  the 
war  may  be  double  or  treble  the  measurable 
military  expenditures.  This  wholesale  destruc- 
tion of  capital  must  necessarily  influence  for 
many  years  to  come  the  monetary  and  financial 
institutions  of  the  leading  countries  of  the 
world,  must  compel  changes  in  international 
finance,  must  lessen  the  industrial  output  of 
many  countries,  modify  the  conditions  of  in- 
ternational competition,  and,  by  means  of  in- 
creased prices  and  lessened  opportunity,  make 

151 


PROBLEMS  OF  READJUSTMENT 

living  conditions  harder  for  the  people  of 
Europe  and  for  those  in  many  other  parts  of 
the  world. 

To  what  extent  and  in  what  manner  the  pres- 
ent misfortunes  of  Europe  will  affect  the  in- 
ternational trade  and  domestic  commerce  of  the 
United  States ;  to  what  degree  the  United  States 
will  supplant  Europe  as  the  financial  and  inter- 
national banking  center;  and  in  what  particu- 
lars the  economic  position  of  the  United  States 
among  the  industrial  and  commercial  countries 
of  the  world  will  be  benefited,  are  problems  to 
which  economists  and  business  men  are  giving 
earnest  thought,  with  the  hope  of  being  able 
to  read  aright  the  horoscope  of  the  world's  eco- 
nomic future. 

Of  course  no  one  can  at  the  present  time  defi- 
nitely predict  how  the  great  European  War  will 
affect  the  financial,  commercial  and  industrial 
interests  of  the  United  States.  There  are  too 
many  unknown  factors  in  the  problem.  It  is 
not  known  how  long  the  war  will  last,  nor  how 
many  nations  will  become  involved  in  the  titanic 
struggle.  This  paper  is  being  written  just  at 
the  time  Italy  is  joining  the  war.  It  is  probable 
that  some  of  the  Balkan  States,  and  possibly 
other  countries  of  Europe,  may  yet  become  in- 

152 


THE  WAR,  COMMERCE  AND  FINANCE 

volved  in  the  struggle.  Indeed,  it  is  within  the 
realm  of  possibility  that  the  United  States  it- 
self may  be  unable  to  protect  American  national 
and  individual  rights  while  maintaining  her  po- 
sition of  neutrality.  Assuming  that  the  United 
States  succeeds  in  remaining  neutral — as  every 
patriotic  citizen  most  earnestly  hopes  will  be 
possible — also  assuming  that  the  war  will  not 
include  more  nations  than  have  already  been 
drawn  into  the  conflict,  and  assuming  further 
that  the  struggle  will  continue  for  another 
twelve  months  and  thus  last  for  a  period  of 
about  two  years,  what  will  probably  be  the  ef- 
fect of  the  war  upon  the  economic  future  of 
the  United  States?  In  answering  this  general 
question  it  will  be  well  to  consider  first  how 
the  war  will  affect  the  American  money  market 
and  the  position  of  the  United  States  as  a  finan- 
cial and  banking  center. 

The  first  and  most  obvious  effect  of  the  whole- 
sale destruction  of  capital  by  the  European 
War  will  be  a  higher  rate  of  interest.  Interest 
rates  were  stiff  before  the  beginning  of  the 
present  war,  the  relatively  high  rates  of  inter- 
est that  have  prevailed  during  recent  years  be- 
ing thought  by  experts  to  have  been  the  result 
of  the  destruction  of  property  by  the  series  of 

153 


PROBLEMS  OF  READJUSTMENT 

wars  that  occurred  from  1898  to  1905.  The 
Spanish-American  War  is  said  to  have  cost  a 
billion  of  dollars,  the  Russo-Japanese  War  an- 
other billion,  and  the  Boer  War  two  billion  dol- 
lars. The  direct  expense  of  these  three  wars 
amounted  to  at  least  four  billion  dollars.  The 
effect  of  the  destruction  of  that  amount  of  capi- 
tal upon  the  rate  of  interest  commanded  by  in- 
vestment capital  had  not  been  overcome  when 
the  present  war  started. 

It  is  certain  that  the  demand  for  capital  for 
at  least  two  decades  following  the  close  of  the 
present  war  will  be  abnormal.  Had  there  been 
no  war,  there  would  have  been  a  relatively  large 
demand  for  capital  in  1915-16.  In  several  coun- 
tries, particularly  in  the  United  States,  times 
have  been  dull  and  a  period  of  business  expan- 
sion seems  about  to  begin.  To  secure  capital 
that  must  be  obtained  even  at  high  interest 
rates,  Europe  at  the  close  of  the  war  will  bor- 
row from  all  countries  that  have  surplus  capital. 
American  capitalists  will  unquestionably  ad- 
vance large  sums  to  European  borrowers,  and 
American  investors  will  be  able  to  secure  high 
rates  of  interest  not  only  because  of  the  neces- 
sities of  European  borrowers,  but  also  on  ac- 
count of  the  opportunities  for  the  investment 

154 


THE  WAR,  COMMERCE  AND  FINANCE 

of  American  capital  in  domestic  industrial  en- 
terprises. 

If  the  great  nations  now  at  war  succeed  in 
making  peace  with  each  other  before  the  credit 
of  any  one  of  the  nations  collapses  and  thus 
endangers  or  overthrows  the  credit  institutions 
of  other  countries,  we  may  expect  peace  to  be 
followed  by  an  entirely  abnormal  inflation  of 
credit.  Indeed,  all  of  the  powers  at  war  have 
made  a  greater  use  of  credit  than  would  have 
been  deemed  possible.  About  twelve  billion  dol- 
lars of  war  loans  have  already  been  floated  or 
authorized.  Great  Britain  has  issued  between 
two  hundred  and  three  hundred  million  dollars 
of  paper  currency  redeemable  in  gold  by  the 
Bank  of  England;  and  the  bank  has  agreed  to 
make  loans  to  the  Government  taking  as  se- 
curity the  Government's  bonds  issued  in  the 
war  loans.  The  Bank  of  France  has  in- 
creased its  note  issue  more  than  fifty  per 
cent.,  and  cities  and  towns  in  different  parts  of 
France  have  issued  large  quantities  of  paper 
money.  Likewise,  in  Germany,  loan  banks  in 
different  parts  of  the  empire,  with  the  approval 
and  aid  of  the  Government  and  the  Reichsbank, 
have  put  large  quantities  of  paper  money  in  cir- 
culation and  the  banks  have  accepted  practi- 

155 


PROBLEMS  OF  READJUSTMENT 

cally  all  kinds  of  property  as  a  basis  for  credit 
and  financial  assistance.  The  termination  of 
the  war  will  not  bring  an  end  to  the  use  of  gov- 
ernment credit,  provided  the  financial  position 
of  the  several  governments  at  the  close  of  the 
war  is  such  that  further  use  may  be  made 
of  government  credit.  Capital  will  be  so  greatly 
needed  that  the  revival  of  business  will  de- 
pend very  largely  upon  government  assistance, 
and,  if  aid  can  be  given,  it  is  certain  that  every 
form  of  government  credit  that  can  be  safely  de- 
vised will  be  employed  in  aiding  the  revival  of 
industry  and  trade. 

The  demand  for  gold  will  continue  for  some 
time  after  the  close  of  the  war,  and  there  is 
much  danger  that  the  supply  of  gold  in  the 
United  States  will  be  reduced  to  an  unsafe 
amount.  Fortunately,  the  Federal  Reserve  Act 
has  established  a  banking  system  that  will  prob- 
ably enable  the  United  States  adequately  to  pro- 
tect its  supply  of  gold.  It  is  most  fortunate 
for  the  country  that  the  banking  laws  of  the 
United  States  were  revised  in  1914.  The  finan- 
cial situation  of  the  country  would  have  been 
even  better  today  had  the  banking  laws  been 
revised  a  year  earlier. 

It  is  the  expectation  of  many. persons  that 
156 


THE  WAR,  COMMERCE  AND  FINANCE 

the  financial  and  industrial  strength  of  Europe 
will  be  so  reduced  by  the  present  great  war  that 
New  York  City  will  be  able  to  supersede  London 
as  the  primary  money  center  of  the  world.  Un- 
doubtedly, the  United  States  will,  as  a  result 
of  the  war,  occupy  a  much  more  important  posi- 
tion in  international  banking  than  it  now  holds ; 
and  it  is  possible  that  at  least  a  part  of  the  bills 
of  exchange  drawn  in  the  transactions  of  inter- 
national trade  will,  in  the  future,  be  in  terms  of 
the  dollar  instead  of  the  sovereign,  and  will  be 
drawn  against  New  York  instead  of  London. 
At  the  present  moment,  a  Pan-American  Finan- 
cial Conference  is  in  session  in  Washington, 
called  together  by  the  United  States  Secre- 
tary of  the  Treasury  to  consider  how  the 
United  States  may  best  cooperate  with  the 
other  countries  of  the  American  continent 
to  provide  the  funds  and  banking  facilities 
required  for  the  present  and  future  conduct 
of  the  trade  of  Central  and  South  American 
countries. 

It  will  be  well,  however,  not  to  expect  that 
New  York  will  suddenly  become  the  world's 
leading  financial  center.  As  was  stated  by  Mr. 
T.  W.  Lamont,  of  the  firm  of  J.  P.  Morgan  and 
Company,  in  a  paper  read  April  30, 1915,  before 

157 


PROBLEMS  OF  READJUSTMENT 

ihe  American  Academy  of  Political  and  Social 
.Science : 

' '  Many  people  seem  to  believe  that  New  York 
is  to  supersede  London  as  the  money  center  of 
the  world.  In  order  to  become  the  money  cen- 
ter we  must  of  course  become  the  trade  center 
of  the  world.  That  is  certainly  a  possibility. 
Is  it  a  probability?  Only  time  can  show.  But 
my  guess  would  be  that,  although  subsequent 
to  the  war  this  country  is  bound  to  be  more  im- 
portant financially  than  ever  before,  it  will  be 
many  years  before  America,  even  with  her  won- 
derful resources,  energy  and  success,  will  be- 
come the  financial  center  of  the  world.  Such  a 
shifting  cannot  be  brought  about  quickly,  for  of 
course  to  become  the  money  center  of  the  world 
we  must,  as  I  have  said,  become  the  trade  cen- 
ter ;  and  up  to  date  our  exports  to  regions  other 
than  Great  Britain  and  Europe  have  been  com- 
paratively limited  in  amount.  We  must  culti- 
vate and  build  up  new  markets  for  our  manu- 
facturers and  merchants,  and  all  that  is  a  mat- 
ter of  time." 

Mr.  Lament  is  unquestionably  correct  when 
he  suggests  that  no  country  can  become  a  finan- 
cial center  of  the  world  unless  it  enters  largely 
.and  widely  into  international  trade.  The  fu- 

158 


THE  WAR,  COMMERCE  AND  FINANCE 

ture  of  the  United  States  in  international 
finance  will  depend  upon  the  success  attained 
by  this  country  during  the  present  war,  and  sub- 
sequent thereto,  in  building  up  its  foreign  com- 
merce. What  are  the  prospects  in  this  regard! 

The  immediate  effects  of  the  war  upon  Amer- 
ican commerce  have  been  to  stop  all  direct 
trade  with  Germany,  to  limit  greatly  the  trade 
to  neutral  countries,  and  to  render  difficult  and 
dangerous  all  intercourse  with  the  Allies.  The 
foreign  trade  of  the  United  States  in  numerous 
commodities  has  been  greatly  limited  in  quan- 
tity and  trade  as  a  whole  is  being  carried  on 
very  expensively  on  account  of  the  high  freight 
and  insurance  rates.  Certain  articles  such  as 
foods  and  military  supplies  are  being  exported 
in  greatly  increased  volume.  The  effect  of  the 
war  upon  imports  has  been  greater  than  upon 
exports. 

At  the  close  of  every  important  war  that  has 
interrupted  trade  and  interfered  with  the  in- 
dustrial activities  of  two  or  more  producing 
countries,  there  is  a  sudden  expansion  of  com- 
merce, due  to  the  effort  of  producers  to  dis- 
pose of  accumulated  stocks,  and  to  the  desire  of 
buyers  to  secure  materials  with  which  to  renew 
production,  and  also  because  of  the  extraordi- 

159 


PROBLEMS  OF  READJUSTMENT 

nary  effort  which  everybody  makes  to  recoup 
the  losses  suffered  during  and  in  consequence 
of  the  war. 

It  is  certain  that  European  purchases  from 
the  United  States  will  be  large  for  the  first  year 
or  two  following  the.  declaration  of  peace.  Nec- 
essarily, those  purchases  will  be  made,  for 
the  most  part,  upon  credit;  and  European 
buyers  will  make  use  of  their  credit  to  the  full- 
est extent  in  order  to  secure  the  materials  and 
supplies  required  to  renew  industry  upon  as 
large  a  scale  as  capital  and  labor  conditions  will 
permit.  After  having  made  these  large  pur- 
chases immediately  following  the  war,  all  pro- 
ducers in  Europe  will  necessarily  be  obliged  to 
buy  with  unusual  caution  and  to  limit  purchases 
to  the  smallest  possible  proportions.  Instead 
of  buying  freely,  the  European  producers  will 
endeavor  to  sell  the  products  which  they  have 
manufactured  during  the  first  year  or  two  in 
order  to  pay  off  their  debts  and  to  secure  cap- 
ital for  further  industrial  activities. 

Thus  immediately  following  the  war  the  ex- 
ports from  the  United  States  to  Europe  will  be 
large,  and  this  period  of  heavy  exports  will  be 
followed  by  large  imports  into  this  country  ac- 
companied by  a  restricted  export  trade.  Ameri- 

160 


THE  WAR,  COMMERCE  AND  FINANCE 

can  industries,  having  been  stimulated  to  un- 
usual activity  immediately  following  the  war, 
will  probably  experience  a  severe  check  two  or 
three  years  after  the  war;  and,  if  a  panic  is 
avoided,  it  will  be  due  to  the  foresight  and  busi- 
ness restraint  of  American,  manufacturers,  par- 
ticularly the  large  business  organizations  that 
control  a  relatively  large  share  of  the  output 
of  staple  industries.  Every  great  war  of  the 
last  century  has  been  followed  by  a  period  of 
feverish  business  activity  which  has,  within  a 
few  years,  been  succeeded  by  a  business  depres- 
sion of  greater  or  less  severity.  It  remains  to 
be  seen  whether  the  lessons  of  history  have  been 
well  enough  learned  by  the  captains  of  Ameri- 
can industry  to  enable  them  to  prevent  the  repe- 
tition of  what  has  happened  after  previous 
wars. 

South  America,  Africa  and  Oriental  countries 
are,  at  the  present  time,  unable  to  secure  from 
Europe  many  of  the  articles  which  they  have 
regularly  purchased  from  European  exporters. 
Likewise,  the  European  market  for  many  South 
American,  African  and  Oriental  goods  is 
greatly  restricted.  The  conditions  seem  ex- 
traordinarily favorable  for  the  rapid  expansion 
of  the  foreign  trade  in  the  United  States.  If 

161 


PROBLEMS  OF  READJUSTMENT 

the  war  continues  through  1916,  American  pro- 
ducers ought  to  secure  a  portion  of  the  markets 
that  have  previously  been  supplied  from 
Europe.  It  was  expected  when  the  war  broke 
out  that  there  would  immediately  be  a  large  in- 
crease in  the  trade  of  the  United  States  with 
South  America.  The  expectation,  however,  was 
not  realized,  because  the  purchasing  power  of 
South  American  countries  was  greatly  reduced. 
The  banking  and  commercial  connections  of 
South  American  countries  having  been  mainly 
with  Europe,  the  European  War  almost  par- 
alyzed South  American  trade  and  industry. 
Banking  and  credit  institutions  in  South  Ameri- 
can countries  were  unable  to  be  of  assistance  to 
producers  and  traders,  and  even  now,  nearly  a 
year  after  the  opening  of  the  war,  financial  con- 
ditions in  South  America  are  still  unsettled. 
The  United  States  is  now  beginning  to  secure 
part  of  the  South  American  trade  that  was  for- 
merly carried  on  with  Europe.  Great  Britain, 
however,  is  holding  most  of  her  South  Ameri- 
can commerce,  and,  without  doubt,  Germany 
will  be  able  to  resume  her  South  American  trade 
without  very  great  difficulty  at  the  close  of  the 
war. 

It  will  be  an  advantage  to  the  United  States 
162 


THE  WAR,  COMMERCE  AND  FINANCE 

to  be  in  possession  of  a  part  of  the  commercial 
field  formerly  occupied  by  European  producers 
and  traders,  but  it  would  be  a  mistake  to  expect 
the  United  States  to  be  able  to  hold  all  the  new 
trade  that  will  have  been  diverted  to  her  from 
European  producers  while  the  war  was  in  prog- 
ress. While  European  manufacturers  may  not 
be  able  to  regain  all  the  ground  they  have  lost, 
they  will,  within  a  comparatively  few  years,  re- 
cover most  of  the  trade  that  has  been  taken 
from  them.  There  are  several  reasons  why  this 
is  to  be  expected. 

The  commerce  of  the  United  States  with 
South  America  or  with  other  parts  of  the  world 
depends,  first  of  all,  upon  the  amount  of  capital 
invested  in  foreign  countries.  Up  to  the  pres- 
ent time,  the  industries  of  South  America,  Af- 
rica and  the  Orient  have  been  developed  mainly 
by  British  and  German  capital.  The  people  of 
Belgium,  Holland,  and  some  other  European 
countries  have  also  invested  largely  in  various 
parts  of  the  world.  Trade  follows  capital  into 
foreign  lands.  As  far  as  can  be  learned,  British 
and  German  capitalists  are  retaining  their 
South  American  investments,  with  the  confident 
expectation  of  engaging  actively  in  the  indus- 
tries and  trade  of  South  American  countries 

163 


PROBLEMS  OF  READJUSTMENT 

as  soon  as  the  war  is  ended.  If  American  trad- 
ers compete  in  the  future  successfully  and 
largely  with  European  producers  and  traders 
in  South  American  countries,  it  will  be  in  con- 
sequence of  a  greater  investment  of  American 
capital  than  has  thus  far  been  made  in  South 
America.  What  is  the  prospect  that  such  in- 
vestments will  be  made? 

There  are  definite  indications  that  American 
investors  are  looking  with  increased  favor  upon 
investments  abroad.  It  is  stated  that  seven 
hundred  millions  of  American  capital  have  been 
put  into  Canadian  industries  other  than  agri- 
culture, that  a  half  a  billion  dollars  have  been 
invested  in  Mexico,  Central  America,  Cuba, 
Haiti,  Chile  and  Peru.  The  amounts  that  have 
been  invested  in  other  Latin  American  coun- 
tries cannot  be  stated,  but  they  are  a  consid- 
erable sum.  Since  the  war  began,  Argentina 
has  taken  an  unusual  amount  of  American  cap- 
ital in  the  form  of  merchandise,  for  which  pay- 
ment has  been  made,  in  part,  by  treasury  notes 
of  the  Argentine  Government  sold  in  this 
country. 

It  is  easier  for  any  country  to  secure  trade 
abroad  when  its  citizens  reside  in  the  foreign 
country  with  which  the  trade  is  carried  on. 

164 


THE  WAR,  COMMERCE  AND  FINANCE 

Great  Britain  and  Germany,  notably,  have  built 
up  their  trade  in  South  America,  Africa,  and 
the  Orient  very  largely  because  British  and  Ger- 
man subjects  reside  in  large  numbers  in  for- 
eign countries.  It  has  not  yet  become  the  prac- 
tice of  American  citizens  to  reside  abroad  in 
any  considerable  numbers.  Industrial  oppor- 
tunities at  home  have,  until  recently,  been  more 
alluring  than  the  possibilities  of  securing  wealth 
abroad.  In  all  probability,  the  time  has  come 
when  increasing  numbers  of  persons  born  and 
educated  in  the  United  States,  will,  for  busi- 
ness and  other  reasons,  make  their  residence 
in  South  America,  Africa,  and  the  Orient,  and 
this  will  unquestionably  prove  to  be  of  assist- 
ance to  the  United  States  in  holding  and  devel- 
oping the  foreign  trade  obtained  during  the 
period  of  the  war. 

A  former  handicap  upon  the  development  of 
the  foreign  trade  of  the  United  States  has  been 
remedied  by  Sections  13,  14  and  25  of  the  Fed- 
eral Reserve  Act.  Now,  for  the  first  time,  it 
is  possible  for  an  American  bank  chartered  un- 
der the  National  Banking  Act,  to  establish  and 
maintain  branches  in  foreign  countries.  Sec- 
tion 25  of  the  Federal  Reserve  Act  provides 
that  "any  national  banking  association  possess- 

165 


PROBLEMS  OF  READJUSTMENT 

ing  a  capital  and  surplus  of  $1,000,000  or  more" 
may,  with  the  approval  of  the  Federal  Eeserve 
Board,  establish  "branches  in  foreign  countries 
or  dependencies  of  the  United  States  for  the 
furtherance  of  the  foreign  commerce  of  the 
United  States. ' '  This  provision  of  the  act  has 
already  been  made  use  of.  The  National  City 
Bank  of  New  York  has  established  branches  at 
Buenos  Aires  in  the  Argentine  Eepublic,  and  in 
Eio  de  Janeiro  and  Santos  in  Brazil.  Permis- 
sion has  been  given  that  institution  to  establish 
a  West  Indian  branch  with  a  main  office  at  Ha- 
vana and  with  several  sub-branches  at  various 
points  in  Cuba,  Jamaica  and  Santo  Domingo. 
The  authority  to  open  a  branch  bank  at  Rio 
de  Janeiro  also  included  the  right  to  operate 
sub-branches  at  several  points  in  Brazil.  In  all 
probability,  other  American  banks  interested  in 
foreign  trade  will  establish  branches  in  dif- 
ferent parts  of  the  world. 

Section  13  of  the  Federal  Reserve  Act  pro- 
vides that  * '  any  member  bank  may  accept  drafts 
or  bills  of  exchange  drawn  upon  it  and  growing 
out  of  transactions  involving  the  importation 
or  exportation  of  goods  having  not  more  than 
six  months  sight  to  run."  Banks  may  accept 
foreign  bills  of  exchange  to  an  amount  equal  to 

166 


THE  WAR,  COMMERCE  AND  FINANCE 

one-half  of  their  paid-up  capital  stock  and  sur- 
plus. This  makes  it  possible  for  American 
banks  to  rediscount  acceptances  based  upon  im- 
ported and  exported  goods,  and  opens  a  new 
field  in  which  to  conduct  business,' while  enabling 
banks  in  this  country  to  be  of  great  assistance 
in  the  future  development  of  American  for- 
eign trade.  The  banking  prerequisites  of  the 
development  of  a  larger  trade  between  the 
United  States  and  South  America  seem  now 
to  have  been  met.  As  the  trade  increases  it  will 
be  possible  to  afford  merchants  and  manufac- 
turers the  necessary  international  banking  fa- 
cilities. 

The  fact  that  the  relatively  small  volume  of 
commerce  that  has  been  carried  on  between  the 
United  States  and  most  South  American  coun- 
tries up  to  the  present  time  has  been  trans- 
ported, for  the  most  part,  in  foreign  ships,  and 
that  there  has  been  no  marked  tendency  to  es- 
tablish American  steamship  lines  for  opera- 
tion between  the  ports  of  the  United  States  and 
countries  of  South  America,  has  caused  many 
students  of  commerce  to  argue  that  the  future 
development  of  the  trade  of  the  United  States 
with  American  countries  to  the  south,  will  de- 
pend upon  provision  being  made,  either  by  the 

167 


PROBLEMS  OF  READJUSTMENT 

Government  or  by  private  capital,  for  a  large 
increase  in  transportation  facilities.  Undoubt- 
edly, regular  and  adequate  steamship  services 
from  American  ports  to  South  American  coun- 
tries would  make  the  development  of  commerce 
easier,  and  tend  to  diversify  as  well  as  to  extend 
the  trade  between  North  and  South  American 
countries.  It  should  be  remembered,  however, 
that  steamship  lines  and  other  transportation 
agencies  are  merely  trade  facilities  which  cap- 
ital will  provide  whenever  it  becomes  evident 
that  profit  can  be  secured  by  establishing  and 
maintaining  such  facilities. 

Trade  development  depends  primarily  upon 
the  existence  or  non-existence  of  favorable  in- 
dustrial, financial  and  mercantile  conditions. 
Without  doubt,  production  is  carried  on  within 
the  United  States  so  economically  that  Ameri- 
can producers  of  many  kinds  of  articles  can 
compete  successfully  with  manufacturers  in 
other  countries ;  and,  as  has  been  pointed  out  in 
this  paper,  it  seems  probable  that  the  interna- 
tional banking  facilities  needed  in  carrying  on 
a  larger  trade  between  North  and  South  Amer- 
ica are  about  to  be  provided.  There  remains, 
however,  for  American  manufacturers  and 
traders  to  develop  the  merchandising  meth- 

168 


THE  WAR,  COMMERCE  AND  FINANCE 

ods  by  means  of  which  European  mer- 
chants have  secured  the  major  share  of  the 
foreign  trade  of  South  American  coun- 
tries. For  some  reason,  American  producers 
and  merchants  are  not  as  successful  traders  as 
are  the  merchants  of  Great  Britain  and  Ger- 
many. The  normal  attitude  of  the  American 
manufacturer  is  that  the  superiority  of  his 
goods  will  guarantee  their  popularity  with  for- 
eign buyers ;  he  feels  it  is  necessary  only  to  call 
the  foreigner's  attention  to  the  character  of 
American  goods  and  to  the  opportunity  the  for- 
eigner has  to  secure  goods  in  the  United  States. 
The  British,  and  particularly  the  German,  mer- 
chants, on  the  contrary,  have  actively  solicited 
the  trade  of  the  South  American  buyers,  and 
have  sought  to  adapt  European  goods  and 
European  merchandising  methods  to  the  needs 
and  customs  of  South  American  producers. 
These  generalizations  apply  broadly,  and,  as  in 
the  case  of  all  general  rules,  there  are  excep- 
tions. There  are,  indeed,  evidences  of  the  de- 
velopment of  better  merchandising  methods  on 
the  part  of  American  producers  and  exporters. 
The  least  difficult  facility  to  secure  in  the  de- 
velopment of  foreign  trade  is  transportation. 
The  world  over,  ships  are  seeking  cargo  and, 

169 


PROBLEMS  OF  READJUSTMENT 

except  when  temporarily  prevented  by  a  war 
between  commercial  nations,  shipping  facilities 
can  be  secured  in  proportion  to  the  needs  of 
trade.  If  American  financiers  and  manufactur- 
ers succeed  in  developing  a  larger  South  Ameri- 
can trade,  that  trade  will  promptly  call  into  be- 
ing adequate  shipping  facilities.  It  will  not  be 
necessary  for  the  United  States,  even  tempo- 
rarily, to  engage  in  the  steamship  business,  al- 
though the  Government  should  do  whatever  it 
can  to  remove  the  obstacles  to  the  investment  of 
private  capital  in  the  business  of  ocean  trans- 
portation. The  function  of  the  Government  is 
to  create  such  trade  conditions  as  will  enable 
bankers,  manufacturers  and  merchants  profit- 
ably to  engage  in  international  trade.  When 
trade  can  be  carried  on  profitably  on  a  large 
scale,  shipowners  will  be  quick  to  supply  the 
requisite  transportation  facilities. 

In  this  connection,  it  is  important  to  consider 
what  the  effect  of  the  present  war  will  be  upon 
the  supply  of  shipping  and  upon  ocean  freight 
rates.  A  large  tonnage  of  merchant  shipping 
has  already  been  destroyed,  and  submarines  are 
almost  daily  sinking  one  or  more  vessels.  Ef- 
forts are  being  made  by  the  United  States  to 
bring  about  some  limitation  upon  the  destruc- 

170 


THE  WAR,  COMMERCE  AND  FINANCE 

tive  methods  of  submarine  warfare,  but  it  re- 
mains to  be  seen  whether  a  check  will  be  put 
upon  the  unprecedented  destruction  of  ocean 
shipping.  What  will  be  the  total  loss  of  mer- 
chant shipping  during  the  war  cannot  be  fore- 
told; but,  although  the  loss  will  be  large,  the 
percentage  of  the  world's  total  shipping  that  is 
destroyed  may  not  be  greater  than  the  percent- 
age representing  the  decrease  in  the  volume  of 
international  trade  that  will  result  from  the  de- 
struction of  capital  during  the  war  and  from 
the  reduced  industrial  output  during  the  years 
of  reconstruction  of  industry  following  the  war. 
As  soon  as  the  war  closes  there  will  be  restored 
to  the  merchant  marine  a  large  tonnage  of  ves- 
sels that  have  been  requisitioned  for  transport 
services  and  for  other  naval  uses.  It  should  be 
remembered  that  Germany's  large  merchant 
marine  will  probably  not  be  much  reduced  by 
the  war,  and  that  some  of  the  neutral  countries, 
including  the  United  States,  will  have  a  larger 
tonnage  of  merchant  shipping  at  the  close  of 
the  war  than  they  had  at  the  beginning.  After 
the  first  few  months  have  elapsed,  following 
the  close  of  hostilities,  the  supply  of  ocean  ship- 
ping may  be  quite  equal  to  the  needs  of  com- 
merce. If  so,  ocean  freight  rates  will  be  reason- 

171 


PROBLEMS  OF  READJUSTMENT 

able  and  may  even  be  relatively  low.  Should 
the  revival  of  business  at  the  close  of  the  war 
be,  as  some  persons  fear  it  will  be,  so  active 
and  unrestrained  as  to  lead  to  overproduction 
and  overtrading  on  the  part  of  such  countries 
as  can  command  the  capital  for  industrial  devel- 
opment, and  should  this  boom  period  be  fol- 
lowed by  a  severe  panic  within  two  or  three 
years  after  the  end  of  the  war,  there  will  be  a 
superabundance  of  ocean  shipping  during  the 
years  of  business  depression  and  freight  rates 
on  the  ocean  will  be  unprofitably  low. 

The  probable  effect  of  the  war  upon  immigra- 
tion into  the  United  States  is  a  subject  of  great 
importance.  While  the  war  lasts  immigration 
will  be  practically  at  a  standstill,  because  most 
of  the  immigrants  come  from  the  countries  now 
at  war  with  each  other.  Will  the  close  of  hos- 
tilities be  followed  by  a  rush  of  immigrants  to 
this  country,  or  will  the  higher  wages  in  Europe 
and  the  reduction  which  the  war  has  made  in 
the  number  of  laborers  in  Europe  reduce  the 
volume  of  immigration  to  the  United  States  ? 

Every  important  European  war  during  the 
past  one  hundred  years  has  been  followed  by  an 
increase  in  immigration  into  the  United  States. 
After  the  close  of  the  long  Napoleonic  wars 

172 


THE  WAR,  COMMERCE  AND  FINANCE 

there  was  a  marked  rise  in  the  tide  of  emigra- 
tion, and  the  same  was  true  of  the  years  follow- 
ing the  European  revolution  of  1848.  The 
Franco-Prussian  War  also  stimulated  emigra- 
tion to  the  United  States.  It  is  the  opinion  of 
Dr.  Frank  J.  Warne,  who  is  a  recognized  au- 
thority upon  immigration  questions,  that  the 
present  destructive  war  will  greatly  reduce  the 
economic  opportunities  of  the  working  classes 
of  Europe;  that  extremely  burdensome  taxes 
will  necessarily  be  levied  by  all  governments 
to  pay  interest  upon  the  debts  created  during 
the  war,  and  that  economic  distress  will  be  in- 
evitable and  severe.  Dr.  Warne  believes  that 
economic  conditions  in  the  United  States  will 
be  the  opposite  of  those  in  Europe,  and  that  the 
prosperous  times  in  this  country  will  induce 
great  numbers  of  European  families  to  seek  by 
emigration  to  escape  from  the  unfortunate  con- 
ditions that  will  prevail  in  Europe.  This  ten- 
dency to  emigrate  will,  moreover,  be  strength- 
ened by  the  active  solicitation  of  steerage  pas- 
sengers that  will  be  carried  on  by  numerous 
steamship  lines.  All  of  the  transatlantic  pas- 
senger lines  will  be  eager  to  make  up  for  the 
losses  sustained  because  of  the  suspension  of 
passenger  traffic  during  the  war. 

173 


PROBLEMS  OF  READJUSTMENT 

This  forecast  as  to  the  effect  of  the  war  upon 
immigration  into  the  United  States  from  Europe 
will  prove  to  be  correct,  provided  the  war  lasts 
as  long  as  two  years.  If  the  struggle  is  con- 
tinued for  that  length  of  time,  the  destruction 
of  capital  and  the  paralysis  of  industry  will  be 
so  great  as  to  make  it  difficult,  if  not  impossible, 
for  European  industries  to  regain  their  normal 
activities  until  some  years  after  the  close  of  the 
war.  If  the  war  should  come  to  an  end  in  1915, 
it  may  be  that  the  industrial  opportunities  in 
Europe  will  not  be  so  lessened  as  to  make  it 
necessary  for  the  laboring  classes  of  Europe 
to  seek  a  livelihood  by  emigration  to  the 
United  States.  It  should  be  remembered,  more- 
over, that  the  patriotic  impulses  of  the  masses 
of  people  of  every  country  have  been  aroused 
and  strengthened,  and  men  may  have  a  senti- 
mental desire  to  remain  in  their  native  land  and 
help  work  out  its  future  prosperity. 

Should  the  war,  as  many  persons  expect,  re- 
sult in  making  the  governments  of  continental 
Europe  more  democratic  in  form  and  ideals, 
the  tendency  to  emigrate  may  be  lessened;  but 
it  is  doubtful  whether  emigration  has  much  con- 
nection with  government  institutions,  although 
it  is  often  claimed  that  people  have  left  Europe 

174 


THE  WAR,  COMMERCE  AND  FINANCE 

for  the  United  States  to  escape  the  oppression 
of  monarchical  government,  and  to  obtain  the 
liberties  that  may  be  secured  under  republican, 
institutions.  It  is  probable  that  most  people 
have  come  to  this  country  because  the  economic 
opportunities  here  were  greater  than  in  their 
native  land.  Political  persecution  has  unques- 
tionably driven  many  people  from  Europe  to 
the  United  States,  but  the  number  that  have 
come  to  this  country  for  that  reason  is  small 
in  comparison  with  those  that  have  been  at- 
tracted here  by  the  possibility  of  securing  a 
better  livelihood. 

It  now  seems  probable  that  the  European 
War  will  last  for  two  years.  If  it  is  prolonged 
to  the  end  of  1916  there  doubtless  will  be  a 
large  exodus  to  the  United  States  of  immigrants 
from  Austria-Hungary,  Poland,  southwest  Rus- 
sia, the  Balkan  States  and  Italy,  which  are  the 
sections  of  Europe  that  are  suffering  severely 
from  the  war  and  are  the  regions  from  which 
immigrants  to  this  country  come  in  large  num- 
bers. The  possibility  that  the  war  will  be  fol- 
lowed by  a  rise  in  the  arrivals  in  the  United 
States  of  large  numbers  of  immigrants  from 
southeastern  Europe  makes  it  important  that 
measures  should  be  taken  by  the  United  States 

175 


PROBLEMS  OF  READJUSTMENT 

Government  to  prevent  undesirable  persons 
from  coming  into  the  country.  Such  a  wide- 
spread and  disastrous  -war  as  that  now  in  prog- 
ress in  Europe  is  certainly  to  be  followed  by  a 
great  increase  in  disease,  poverty  and  crime. 
Unless  the  immigration  laws  of  the  United 
States  are  strictly  administered,  the  people  of 
this  country  will  have  to  support  a  largely  in- 
creased population  of  paupers  and  criminals. 
It  will  be  the  duty  of  the  United  States  Gov- 
ernment to  provide  for  the  strict  enforcement 
of  the  immigration  laws. 

This  brief  analysis  of  the  probable  economic 
effects  of  the  European  War  upon  the  United 
States  has  naturally  been  devoted  mainly  to 
questions  of  international  banking  and  finance, 
of  foreign  trade  and  ocean  shipping,  and 
of  immigration.  The  changes  in  the  in- 
ternational economic  relations  of  the  United 
States  promise  to  be  important,  permanent  and, 
for  the  most  part,  advantageous.  If  future  ex- 
perience corresponds  with  present  promise,  the 
internal  development  as  well  as  the  foreign 
commerce  of  the  country  will  be  quickened. 

A  large  and  wider  foreign  trade  means  a 
greater  volume  and  variety  of  production,  an 
increase  in  the  quantity  and  range  of  imports, 

176 


THE  WAR,  COMMERCE  AND  FINANCE 

a  diversification  of  industry  and  commerce,  and 
a  broadening  of  the  foundations  of  American 
economic  interests.  This  means  greater  eco- 
nomic stability,  the  ability  to  endure  more  easily 
the  recurring  ills  of  business  depression,  and  to 
pursue  a  more  conservative  course  through  the 
periods  of  abnormal  prosperity. 

During  the  last  twenty-five  years  the  United 
States  has  been  changing  from  a  country  de- 
voted almost  entirely  to  the  production  of  foods 
and  the  materials  of  industry  to  a  country  hav- 
ing diversified  industries  in  which  manufactures 
occupy  a  prominent  position.  The  exportation 
of  manufactured  goods  is  increasing  in  quan- 
tity, and  foreign  markets  are  being  found  for 
a  greater  variety  of  articles.  The  present  ter- 
rible war  in  Europe  will  accelerate  the  economic 
changes  now  in  progress  in  the  United  States. 
Manufacturing  and  trade  will  increase  more 
rapidly  and,  in  consequence,  the  growth  of  cities 
will  be  faster.  With  the  more  rapid  growth  of 
manufactures  and  foreign  commerce  and  of  the 
population  of  the  cities,  will  come  consequent 
changes  in  social  conditions.  The  social  ideals 
of  rural  and  village  life  that  have  hitherto  been 
so  influential  in  this  country  will,  because  of  the 
more  rapid  development  of  manufacturing  and 

177 


PROBLEMS  OF  READJUSTMENT 

commerce,  give  way  even  more  rapidly  than 
they  are  now  giving  way  to  the  ideals  of  people 
who  work  in  large  establishments  and  live  in 
large  cities.  The  European  War  will  change 
the  economic  activities  and  modify  social  condi- 
tions in  the  United  States. 


VII 


CASPAE  F.  GOODRICH 

I  am  sorry  that  the  President's  stringent  or- 
der on  the  subject  forbids  my  discussing  the 
events  of  the  present  struggle  in  Europe  with 
entire  freedom.  You  can  readily  see  that  to  do 
so  might  reveal  a  bias  which  would  violate  the 
neutrality  in  speech  and  writing  which  our 
Chief  Magistrate  enjoins.  Nevertheless,  with- 
out transgressing  that  order  it  is  possible  to 
analyze  certain  features  and  to  draw  certain 
conclusions  of  technical  interest,  for  this  war 
is  as  full  of  lessons  as  it  is  of  surprises.  To 
call  attention  to  them  may  be  done,  and  I  hope 
I  shall  succeed  in  so  doing,  with  complete  im- 
partiality of  statement,  if  not  of  sympathy,  and 
in  strict  accordance  with  my  Commander-in- 
Chief 's  injunction. 

179 


PROBLEMS  OF  READJUSTMENT 

The  first  thing  that  strikes  the  eye  is  the  total 
wreck  of  preconceived  notions.  The  long  range 
of  modern  arms  was  expected  to  push  back  the 
fighting  line  almost,  if  not  quite,  out  of  sight  of 
the  enemy.  To  be  sure  the  opposing  forces  had 
come  into  personal  contact  in  the  late  Balkan 
wars  but  this  was  attributed  to  local  conditions 
not  likely  to  find  their  counterpart  in  hostilities 
between  first-class  powers.  That  Germans  and 
Frenchmen  should  spend  whole  months  in 
trenches  but  a  few  yards  apart,  should  burrow 
like  rabbits  and  settle  the  possession  of  dis- 
puted ground  by  the  bayonet  or  even  the  fist 
was  inconceivable — yet  all  know  that  was  the 
way  the  trick  was  turned  again  and  again. 
Conversely  on  the  sea,  the  old  time  desire  to 
get  close  aboard  the  enemy  may  have  been, 
doubtless  was,  present,  but  the  actions  off  Coro- 
nel,  off  the  Falkland  Islands,  and  in  the  North 
Sea  were  decided  at  ranges  that  seem  fabulous. 
One  shell  which  landed  on  the  Bluecher  from  a 
distance  of  eighteen  thousand  yards — about 
nine  geographical  miles — is  thought  by  its  dam- 
age to  life  and  vessel  to  have  been,  possi- 
bly, the  one  most  important  factor  in  the  de- 
struction of  that  ship. 

The  greater  range  of  the  newest  guns  has  also 
180 


MILITARY  AND  NAVAL  WARFARE 

proved  decisive  on  shore  in  bombardments  that 
recur  to  you  all.  The  surprise,  however,  lies 
in  the  unsuspected  existence  of  such  guns  and 
not  in  their  efficacy.  To  have  kept  the  forty- 
two-centimeter  howitzer  a  profound  secret  for 
so  long  was  in  itself  a  triumph  which,  I  fear, 
our  more  open  methods  would  have  rendered 
impossible  in  this  country. 

Speed  in  men-of-war,  a  quality  advocated  for 
years  by  one  school  of  naval  thought  and  as 
strongly  opposed,  at  least  in  battleships,  by  an- 
other school,  seems  to  have  practically  demon- 
strated its  value  in  cruisers,  destroyers  and 
submarines,  as  to  which  application  there  never 
has  been  much  controversy.  Should  the  Ger- 
man and  British  battle  fleets  ever  engage,  the 
desirability  of  increasing  speed  at  the  expense 
of  armor  will  be  proved  or  disproved  as  the  case 
may  be.  No  more  pressing  question  from  the 
naval  architect's  standpoint  can  be  imagined. 
It  is  saddening,  however,  to  reflect  on  the  price 
in  human  life  which  its  solution  will  exact. 

Another  surprise  has  been  the  extensive  and 
efficient  use,  by  the  Germans,  of  machine  guns 
of  a  novel  type.  Instead  of  the  mitrailleuses 
and  Nordenfeldts  which  required  horse  traction 
and  were  but  another  form  of  artillery  these 

181 


PROBLEMS  OF  READJUSTMENT 

new  weapons  can  be  and  are  carried  by  one 
man.  In  destructive  effect  on  troops  the  Al- 
lies rank  them  as  second  only  to  shrapnel  and 
ahead  of  the  rifle,  and  surely  the  Allies  know. 
The  result  is  seen  in  a  radical  change  in  tac- 
tics. Formerly  artillery  prepared  the  way  for 
the  infantry  attack.  Today  it  is  the  machine 
gun  which  is  pushed  to  the  front,  infantry  be- 
ing used  to  cover  and  support  its  approach. 

The  appearance  on  the  scene  of  wholly  new 
inventions  like  the  motor  lorry,  the  aeroplane 
and  the  submarine  has  changed  conditions  en- 
tirely and  wrought  unforeseen  modifications  in 
tactics.  It  is  said  that  the  German  advance  on 
Paris  was  stayed  through  the  sudden  bringing 
up  of  heavy  reinforcements  from  that  city  in 
taxi-cabs  and  automobiles,  some  forty  thousand 
cars  in  all.  Shades  of  Napoleon !  Without  mo- 
tor trucks  and  motor  ambulances  the  men  in  the 
field  would,  many  times,  have  gone  hungry 
and  the  wounded  without  that  prompt  care 
which  so  often  makes  the  difference  between  life 
and  death.  We  may  reflect  with  pride  upon 
the  admitted  superiority  of  our  American  Eed 
Cross  automobile  hospitals.  Piou-Piou  and 
Tommy  Atkins  equally  rejoice  when,  if 
wounded,  they  fall  into  our  hands. 

182 


MILITARY  AND  NAVAL  WARFARE 

Gasoline  has  also  made  possible  the  armored 
motor  car  of  whose  exploits  frequent  mention 
is  made.  Armored  trains  were  first  used  in  the 
Tel-el  Kebir  campaign — but  their  use  was  and 
still  is  confined  to  railways.  A  fairly  good 
road,  however,  now  permits  the  employment  of 
their  more  mobile  and  extremely  effective  suc- 
cessor. Even  heavy  guns  up  to  eleven  inches 
in  caliber  are  moved  by  motors,  the  wheels  be- 
ing of  the  caterpillar  type  and  thus  capable 
of  advance  over  poor  roadbeds. 

To  gasoline  is  due  the  flying  machine  which 
as  a  scout  renders  sudden  concentrations  of 
troops  quite  out  of  the  question.  Very  spec- 
tacular have  been  some  of  its  performances  in 
raids  and  bomb-throwing.  Doubts  may  be  en- 
tertained, however,  of  the  real  military  value 
of  such  operations. 

Great  things  were  expected  of  the  Zeppelins 
but,  up  to  the  present  moment,  these  expecta- 
tions do  not  appear  to  have  been  fully  realized. 
Damage  they  have  done,  but  nothing  commen- 
surate with  the  hopes  of  their  advocates.  In 
short,  their  tactical  value  has  yet  to  be  proved. 
They  are  quite  unmanageable  in  heavy  weather, 
a  circumstance  which  doubtless  has  limited  their 
use  this  winter.  "With  the  advent  of  spring  and 

183 


PROBLEMS  OF  READJUSTMENT 

summer,  when  gales  are  few  and  breezes  light, 
we  shall  learn  more  of  their  actual  perform- 
ance under  favoring  conditions. 

The  true  history  of  the  submarine  cannot  be 
written  until  the  war  is  over  and  all  the  facts 
made  public.  Upon  them  was  based  the  war 
zone  just  proclaimed  by  Germany.  Its  effi- 
ciency, it  is  thought  by  the  Germans,  will  be 
conclusive.  As  to  this  time  alone  will  tell.  That 
the  German  submarines  have  been  very  active 
and  aggressive  is  certainly  true  but  on  good 
authority  it  is  said  that  a  large  number  of  them 
have  already  been  destroyed.  They  seem  to  be 
as  vulnerable  as  they  are  formidable. 

Monitors  and  other  light-draught  vessels 
have  been  used  along  the  Belgian  coast  to  help 
stem  the  German  advance  on  Calais.  Nothing 
new  in  this.  Our  Civil  War  abounds  in  in- 
stances of  effective  cooperation  between  armies 
on  shore  and  gunboats  on  the  water. 

Wireless  telegraphy  is  another  recent  inven- 
tion to  exercise  a  notable  influence  on  the  de- 
velopment of  this  war.  It  is  omnipresent,  be- 
ing found  with  troops  or  carried  by  men-of-war, 
by  torpedo  boats,  by  air  ships  and  even  by  sub- 
marines, which  doubtless  owe  much  of  their  ef- 
ficiency to  this  invisible  means  of  control.  We 

184 


MILITARY  AND  NAVAL  WARFARE 

may  indeed  say  that  it  is  present  with  every 
military  or  naval  unit,  however  small.  Its  value 
was  so  clearly  understood  by  the  Germans  that, 
in  making  ready  for  hostilities,  they  established 
radio  stations  pretty  much  all  over  the  world. 
It  was  through  such  stations  that  they  were 
able  to  collect  their  scattered  vessels  into  the 
squadron  which  sank  the  Good  Hope  and  Mon- 
mouth  off  the  Chilean  coast  last  December. 

But  a  few  years  old,  wireless  telegraphy  has 
so  completely  won  its  place  in  military  and 
naval  equipments,  that  today  it  is  impossible  to 
imagine  a  general  or  an  admiral  conducting  a 
campaign  without  the  hourly  use  of  this  mar- 
velous abridger  of  time  and  space. 

I  have  sought,  within  the  limitations  imposed 
on  me  by  the  President's  order,  to  indicate  a 
few  of  the  changes  brought  about  in  the  tech- 
nique of  warfare.  They  are  most  important 
and  they  convey  useful  hints  even  'to  us.  . 

A  similar  search  in  the  domain  of  strategy 
remains  fruitless.  The  same  rules  are  observed 
which  governed  the  campaigns  on  land  of  Fred- 
erick the  Great  and  Napoleon  and  on  the  sea 
those  of  Hawke  and  Nelson.  Astounding  as  are 
the  differences  between  the  tactics  of  the  pres- 
ent and  the  past,  still  more  astounding  is  the 

185 


PROBLEMS  OF  READJUSTMENT 

changelessness  of  that  other  side  of  war — 
strategy.  What  the  latter  was  it  ever  will  be. 
The  tactical  instruments  by  which  it  works  may 
vary  as  they  will  but  its  principles  are  always 
the  same.  Upon  them  we  may  rely  with  abso- 
lute confidence.  If  you  hold  to  them  firmly  you 
will  be  able,  through  careful  study,  to  see  into 
the  future  as  far  as  it  may  be  given  to  mortal 
man;  possibly  even  to  forecast  the  eventual 
outcome  of  this  gigantic  struggle.  And  this 
study  I  commend  to  you  as  well  worth  the  time 
and  trouble  it  may  cost. 

These,  then,  as  I  see  them,  are  the  chief  les- 
sons of  the  War  in  Europe,  the  protean  changes 
in  tactics  and  the  immutability  of  strategy. 


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